ISLAMABAD: The Cabinet Committee on Privatisation (CCoP) has approved a restructuring plan for Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO) and Islamabad Electric Supply Company (IESCO), moving the first batch of power distribution companies closer to the next stage of the government’s privatisation and reform programme.
The committee, chaired by the Deputy Prime Minister, approved the plan as part of efforts to make electricity distribution companies more financially sustainable, professionally managed and better equipped to improve service delivery.
Under the restructuring framework, selected assets — including land parcels — and certain liabilities, including post-retirement benefits of already retired employees along with related funds, will be transferred to a government-owned Special Purpose Vehicle (SPV).
Retirement benefits of serving employees will remain with the respective distribution companies, while inter-government receivables and payables will be netted off to settle outstanding government claims.
The Privatisation Commission said the restructuring has been designed to remain fiscally neutral while improving the transaction value for the government and making the proposed transactions commercially viable.
Service continuity will remain a priority during the process, while employee interests will be handled under applicable laws and transaction arrangements, according to the ministry.
Muhammad Ali, Adviser to the Prime Minister on Privatisation, said electricity consumers would continue to be protected under the existing regulatory framework.
He said tariffs would continue to be determined through the applicable National Electric Power Regulatory Authority (NEPRA) process and notified by the government, while the reform programme would focus on improving reliability, efficiency and customer service.
FESCO, GEPCO and IESCO collectively serve more than 14 million consumers across major industrial, commercial and urban centres.
The government says improving their performance is central to reducing inefficiencies in the power sector and supporting more competitive electricity services for households, businesses and industry.
The approval marks a key step in the restructuring of Pakistan’s power distribution sector as the government prepares the three companies for further privatisation-related action.
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