Govt Approves Restructuring Plan For 3 Major DISCOs Ahead Of Sale

The Cabinet Committee on Privatisation has greenlit a restructuring plan for three major electricity distribution companies, Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO) and Islamabad Electric Supply Company (IESCO), ahead of potential sale. This move is part of the government's wider power sector reform agenda, which seeks to make distribution companies financially viable, professionally run and digitally advanced, all while bolstering electricity services for households, businesses and industry.

Under the approved plan, specific assets such as land and selected liabilities like post-retirement benefits of retired employees will be transferred to a government-owned special purpose vehicle. The retirement benefits for existing employees will remain with their respective distribution companies. Intergovernmental financial transactions will also be balanced out to ensure a viable government stance.

The Privatisation Commission states that the plan is fiscally neutral and aims to increase value for the government without compromising transaction viability. The government emphasized maintaining service continuity and addressing employee interests in line with applicable laws and transaction terms. Advisor to the Prime Minister on Privatisation, Muhammad Ali, assured consumers that they would be safeguarded under Pakistan's regulatory framework.

Tariff decisions, he added, would continue to be made via the National Electric Power Regulatory Authority process and notified by the government, with the reforms focusing on boosting reliability, efficiency and customer service.

FESCO, GEPCO and IESCO together cater to over 14 million consumers in key industrial, commercial and urban regions. The government highlighted that enhancing these companies' performance is crucial for lowering power tariffs and promoting more competitive electricity services in Pakistan's economy. This approval represents the latest step in tackling legacy challenges in the power distribution sector and establishing modern, accountable, and consumer-centred distribution companies as part of the government's broader privatization and power sector reform initiatives.