ISLAMABAD: The proposed privatisation of power distribution companies (Discos) has sparked a debate over constitutional authority, with a Senate subcommittee maintaining that the matter falls within the jurisdiction of the Council of Common Interests (CCI), while the government insists that fresh approval from the forum is not required.
Adviser to the Prime Minister on Privatisation Muhammad Ali told a subcommittee of the Senate Functional Committee on Devolution that the legal and procedural requirements for privatising the distribution companies had been fulfilled. He said the CCI had approved the privatisation of three power generation companies and nine Discos in 2011, while the National Electricity Policy 2021 also supported exploring privatisation options to improve the efficiency of state-owned entities.
He cited a September 25, 2026, letter from the Law Division, which reaffirmed that the earlier CCI decision remained valid and that no fresh approval was necessary.
Mr Ali said the distribution companies had incurred losses exceeding $30 billion over the past 15 years, largely due to electricity theft and operational inefficiencies. He argued that privatisation was essential to improve performance, reduce losses and ease the financial burden on the national exchequer.
He added that the National Electricity Policy 2021 had been formulated after obtaining provincial recommendations and that the privatisation programme had subsequently been approved. Referring the matter back to the CCI at this stage, he warned, could delay the process, undermine investor confidence and further weaken the financial position of the companies.
However, subcommittee convener Senator Zamir Hussain Ghumro questioned whether the proposed privatisation complied with the constitutional distribution of powers, particularly Article 157, which addresses electricity-related matters involving provincial interests.
He stressed that the CCI’s constitutional role could not be bypassed and called for transparency, proper consultation with the provinces and examination of relevant judicial decisions. He directed the authorities to submit the necessary records and supporting documents to establish the legal basis for proceeding without fresh CCI approval.
Officials informed the committee that the CCI had taken 11 relevant decisions and that, according to available records, no province had formally registered reservations. They assured the senators that the relevant decisions and details of provincial consultations would be provided for review.
Senator Ghumro reiterated that the committee’s examination was aimed at ensuring constitutional compliance, transparency and effective parliamentary oversight.
Senate Questions Federal Spending on Devolved Subjects
The subcommittee also examined federal government expenditure on ministries, institutions and statutory bodies dealing with provincial subjects despite the devolution of powers under the 18th Constitutional Amendment.
Reviewing reports from the Auditor General of Pakistan (AGP) and the Accountant General, Senator Ghumro questioned the constitutional and legal basis for approximately Rs2.6 trillion in federal expenditure on the health and education ministries over the past 16 years.
He termed the spending a misuse of taxpayers’ money, arguing that the two ministries had been de-notified as federal subjects in 2010 and that federal expenditure should be restricted to matters falling within the Centre’s constitutional jurisdiction.
He added that the total amount could reach several trillion rupees if spending on other institutions dealing with devolved provincial subjects were included.
Referring to Articles 168 and 169 of the Constitution and the legal framework governing public expenditure audits, the convener questioned the authorisation of such spending from federal resources.
He expressed concern that the information requested by the committee had not been provided within the stipulated timeframe. He maintained that Parliament was the primary authority responsible for authorising public expenditure and that funds from the Federal Consolidated Fund could not be spent on devolved provincial matters without a valid constitutional basis.
AGP officials explained that the audit process was guided by budgets approved by the competent parliamentary forum, while acknowledging certain limitations in audit coverage.
The meeting was attended by Senators Jan Muhammad Buledi and Poonjo Bheel, along with the secretaries of the Cabinet Division and CCI, officials from the Establishment Division and other senior government representatives.
The committee directed the relevant authorities to provide the required documents and explanations to enable a comprehensive assessment of federal expenditure and the proposed privatisation of Discos in light of the Constitution, previous judicial pronouncements and the 18th Amendment.
Story by Amin Ahmed
