Center asks provinces to take over power distribution companies

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ISLAMABAD: The federal government has asked the provinces to take over their respective electricity distribution companies (DISCOs) to reduce the financial burden on the center due to the inefficiency of the companies.

The center has written letters to all the provinces in this regard, asking them to enter into negotiations with the Ministry of Energy (Energy Division) to own their respective DISCOs.

Energy Division officials briefed the Senate Standing Committee on Privatization on Friday, which met under the chairmanship of Senator Shamim Afridi.

They informed that the Cabinet Committee on Privatization (CCoP) at its meeting last month directed the Electricity Division to write to all provinces through the Ministry of Inter-Provincial Co-ordination (IPC) to negotiate the purchase of the DISCOs concerned. Subsequently, letters to this effect were sent to the provinces.

It should be noted that the previous government had also made the offer to the provinces, but they refused to take control of the DISCOs due to huge financial slippages due to high subsidies, electricity theft and loss of distribution.

The committee discussed the privatization of the Peshawar Electric Supply Company (PESCO) and the Islamabad Electric Supply Company (IESCO).

The Privatization Secretary, Dr. Iram A Khan, informed the committee that, taking into account lessons learned in the past and the latest global practices, a working group consisting of officials from the Ministry of Privatization, NEPRA, the energy division, CPPA-G and the World Bank proposed a “Pakistani model”. ”.

He added that as of May 2021, the CCoP had approved the concession contracts for eight of the ten DISCOs, while the management contract had been approved for Quetta Electric Supply Company (QESCO) and Tribal Electric Supply Company (TESCO).

However, there have been subsequent changes in the policy and regulatory framework, which have a direct impact on DISCOs and the scope of concession and management contracts to be developed under this agreement.

Federal Privatization Minister Abid Hussain Bhayo said Sindh was already negotiating with Power Division for the acquisition of SEPCO and HESCO.

He expressed his confidence in the ability of the provinces to succeed in the power distribution sector as well, as Sindh was already in power generation and transmission.

The standing committee directed that regardless of ownership or privatization, in accordance with the new electric policy, the role of provincial, district and law enforcement agencies be institutionalized to limit line losses and mis-collections. .

The committee also deliberated on the 488 acre land which was owned by Sindh Engineering Limited (SEL) but which, due to the complex litigation, became disputed and thus became one of the main obstacles to the privatization of SEL.

At its last meeting, the committee had asked Commissioner Kasur to provide a detailed brief highlighting the questionable points. A detailed presentation was given to the committee who were informed that the matter was pending before the Lahore High Court (LHC).

The Standing Committee, after detailed discussion, unanimously decided that the Chairman would request the Ministry of Industry and Production, by letter, to approach the LHC for an early resolution/elimination of the matter to determine the rightful owner of the property.

The matter regarding the privatization of Jinnah Convention Center (JCC) was postponed to the next meeting. As instructed by the committee at the last meeting, the privatization secretary informed the forum about the hiring and remuneration of the consultants currently working in the commission.

He said appointments, extensions and remuneration were governed by section 11, subsection (2) of the Privatization Commission (PC) Order 2000.

After consultation, the committee decided to establish a three-member sub-committee, which would be briefed on the appointment procedure and other matters relating to these contractual appointments of consultants and advisers.

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