ISLAMABAD: The Privatization Division has told a Senate sub-committee that fresh approval from the Council of Common Interests is not required for the privatisation of power distribution companies, even as lawmakers raised concerns over more than $30 billion in losses incurred by DISCOs over the past 15 years.
In a summary submitted to the Sub-Committee of the Senate Functional Committee on Devolution, the Privatization Division stated that the CCI approved the privatization of three generation companies and nine distribution companies in 2011, and that the 2021 National Electricity Policy (para 5.9.4) further provides that the government “shall explore various options of privatization to improve the efficiency of state-owned entities, where applicable.” Both decisions remain in force, the Division said.
The Division cited a letter from the Law Division dated 25 September 2026, which re-confirmed that in light of the 2011 CCI decision, fresh approval is not required for DISCOs privatization. Accordingly, the Privatization Division reiterated that no new CCI approval is necessary.
The Senate Sub-Committee on Devolution, chaired by Senator Zamir Hussain Ghumro, has expressed reservations over the continuation of the privatization process without a fresh CCI nod. The committee has warned the Privatisation Commission to comply with its earlier direction to refer the matter to the CCI or face parliamentary action, including a potential privilege motion.
The committee has argued that DISCOs perform functions related to provincial matters and that, under the constitutional scheme following the 18th Amendment, such matters should either be transferred to the provinces or regularized through the required constitutional process.
Senator Jan Muhammad Buledi observed during a prior meeting that the 2011 CCI decision was not relevant, as the CCI has been reconstituted multiple times since then.
The sub-committee also demanded audited details of federal spending on devolved and CCI-related matters over the past 16 years, describing such expenditure as a serious concern amid Pakistan’s economic difficulties.
The financial burden of DISCOs has been a persistent drain on public finances. Official data shows that from fiscal year 2014–15 to September 2025, poor performance by DISCOs added Rs2.872 trillion to the country’s circular debt due to transmission and distribution losses exceeding NEPRA-approved benchmarks and lower-than-target recoveries.
The State Bank of Pakistan has noted that DISCOs suffer from weak governance, accountability, and operational management, with issues including electricity theft, unpaid receivables, old meters, and inefficient distribution lines.
Audit disclosures for FY2024–25 revealed that several major DISCOs remain financially distressed, with Lahore Electric Supply Company posting a net loss of Rs45.38 billion and Hyderabad Electric Supply Company recording losses of Rs12.90 billion. Hesco’s accumulated losses surged to Rs513 billion, while Lesco’s reached Rs331.20 billion.
Pakistan has committed to the International Monetary Fund to sell nine state-owned power distribution companies by December 2027, with the first batch of three better-performing companies — Fesco, Gepco, and Iesco — targeted for sale by March.a
