ISLAMABAD: The Competition Commission of Pakistan (CCP) has recommended that Pakistan’s power distribution companies (DISCOs) be privatized or transitioned to public-private partnerships (PPPs) to address critical inefficiencies. In its latest report, “State of Competition in the Key Markets in Pakistan: Power Sector,” the CCP highlights significant challenges facing DISCOs, including high distribution losses, revenue leakages, low bill recovery, electricity theft, and supply constraints.
The report suggests that privatization or PPPs could mitigate these issues, as the amended NEPRA Act now removes the exclusivity clause, opening the regulatory framework for competitive involvement. The CCP proposes breaking down current DISCOs into smaller, regionally managed units, which could enhance localized control, increase market players, and stimulate competition.
Globally, power sector reforms have prioritized reducing government control and leveraging market forces. CCP emphasizes that privatization could counteract poor performance, high costs, limited access, and unreliable supply in Pakistan’s power sector while generating immediate government revenue.
Persistent issues, such as high electricity theft and bill non-payment, have exacerbated financial challenges for DISCOs. The CCP also notes that institutional resistance to modernizing, governance flaws, and corruption in state-owned utilities have hindered efficiency and deterred private and international investments. The report concludes that structural, regulatory, and anti-competitive barriers restrict competition and protect incumbents, further limiting market entry and contestability.
Story by Sohail Sarfraz
