By Arslan Ahmad
Pakistan stands at a critical socio-economic crossroads, captured by two competing visions for its future. On one side is a popular but highly flawed political narrative calling for the creation of new administrative provinces to solve governance failures. On the other side is a pressing, unyielding economic reality: a crippling energy sector circular debt that has now ballooned past 5.29 trillion PKR, strangling our national growth and keeping the country perpetually dependent on foreign bailouts.
Advocating for the creation of new provinces in the current economic climate is a dangerous fiscal mirage. The creation of new provincial boundaries does not inherently fix structural inefficiencies. Instead, it instantly introduces massive, unproductive expenditures. Building new governor houses, sprawling provincial secretariats, launching separate provincial ministries, and hiring armies of bureaucratic staff would drain billions from an already depleted national exchequer. Pakistan simply cannot afford to finance political administrative expansion when its primary economic engine is breaking down due to the energy crisis. Rather than multiplying bureaucratic overheads, the state and the public must pivot their focus toward the root cause of our economic misery: the energy supply chain.
The most viable, non-political, and highly potent solution to fix this crisis is the Divisional Portfolio Model. Instead of empowering new political boundaries, the federal government should unbundle the massive, failing power distribution companies (DISCOs) and split them into smaller, independent corporate entities mapped strictly to existing administrative divisions. For instance, instead of leaving the Multan Electric Power Company (MEPCO) as an unmanageable behemoth, it should be segmented into autonomous, localized units like the Bahawalpur Division Power Portfolio and the Multan Division Power Portfolio.
To guarantee corporate governance, equity democratization, and financial transparency, the state must enforce a strict regulatory mandate: every private entity bidding for these divisional concessions must be listed on the Pakistan Stock Exchange (PSX), or commit to a mandatory Initial Public Offering (IPO) within the first 24 months of operations. By utilizing the capital market via IPOs, these leased divisional companies can raise massive public equity directly from domestic and institutional investors. This capital market model completely eliminates the companies’ reliance on expensive commercial bank debt or state-backed subsidies.
The funds raised from the public through IPOs will be directly utilized to finance capital expenditures, expand solar power infrastructure, and settle the legacy debts of the sector. Furthermore, listing these entities on the PSX ensures absolute corporate oversight, quarterly financial reporting, and protects the sector from backroom political manipulation. Once decentralized into agile, publicly listed division-level units, these portfolios should be leased out to private management consortiums for fixed 5-to-10-year concessions. The structural magic of this model lies in its financial mechanics. Winning private bidders would be required to pay a substantial upfront security deposit and advance lease payments for the first 3 to 5 years.
This massive injection of upfront private capital would be legally ring-fenced and routed directly by the state to clear the legacy multi-trillion-rupee circular debt, instantly unlocking economic liquidity without adding to public debt. Furthermore, this model perfectly addresses the generation cost crisis through localized production. Trapped within a strict NEPRA price cap, these private divisional operators will be forced to abandon expensive, imported thermal fuels and break free from the stranglehold of legacy Independent Power Producers (IPPs). For decades, centralized capacity payments and dollar-indexed contracts with IPPs have fueled the circular debt fire.
By dismantling this centralized dependency and adopting an open-market wholesale billing framework, divisional companies will naturally pivot toward indigenous, low-cost green energy. Pakistan’s vast, underutilized desert terrains—such as the Cholistan desert in South Punjab, the barren expanses of interior Sindh, and the high-radiation zones of Balochistan—will suddenly transform into hotbeds for massive private solar parks. By signing direct power purchase agreements with these solar arrays, divisional companies can secure electricity at a fraction of the current cost. This creates a state of perfect competition. No single private monopoly or centralized IPP cartel will control the national grid. Multiple nimble, division-level players will aggressively compete to lower line losses, eradicate electricity theft through digital smart-metering, and source the cheapest local power.
Arbab-e-Ikhtiyar (the authorities) must realize that the solution to Pakistan’s agony is economic engineering, not political partitioning. By trading the expensive illusion of new provinces for the structural precision of the Divisional Portfolio Model, Pakistan can permanently dissolve its circular debt, transition to low-cost solarization, and build a self-sustaining economic ecosystem for generations to come.