Senate committee inches forward with power sector privatisation plans

ISLAMABAD: The Senate Standing Committee on Privatisation, chaired by Senator Afnanullah, convened to review the ongoing privatisation efforts in Pakistan’s power sector.

Key officials from the Power Division and Privatisation Division briefed the committee on the inclusion of multiple power plants and electricity distribution companies (DISCOs) in the privatisation program.

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Officials from the Power Division confirmed that the Nandipur and Guddu power plants, both operating under GENCOs, have been included in the privatisation list. Most issues surrounding the two plants have reportedly been resolved, although the gas sale and purchase agreement (GSPA) for the Nandipur plant remains pending.

The committee was also informed that the Guddu plant’s land title is under WAPDA, and there is currently a charge on the property that the government plans to remove. The NOC for Guddu’s land has already been obtained, but the land title still needs to be formally transferred.

Chairman Afnanullah expressed skepticism over the resolution of these outstanding issues, noting that “these problems do not seem to get resolved.”

The committee was also briefed on the upcoming privatisation of three DISCOs in the first phase:

• Islamabad Electric Supply Company (IESCO)
• Faisalabad Electric Supply Company (FESCO)
• Gujranwala Electric Power Company (GEPCO)

A financial advisor has been appointed for the process, and the report has already been submitted. The Privatisation Commission is currently reviewing various proposals, with a final decision to be made by the federal cabinet.

Secretary Privatisation Division said that “all three distribution companies are currently profitable”, raising questions from Senator Zeeshan Khanzada, who asked why profitable entities were being sold off. In response, the Secretary clarified that the government’s policy is to exit from doing business, noting that even previously profitable entities like PIA and PMDC eventually became loss-making.

CONCERNS OVER GAS AND OPERATIONAL READINESS

The gas demand for the Nandipur plant is 138 mmcfd, but uncertainties around supply continue to pose challenges for potential buyers. “If there is no gas, we will tell the buyer,” the Secretary of the Privatisation Division said, suggesting that unresolved utility inputs will be disclosed as-is.

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The Secretary also confirmed that all DISCOs will eventually be privatised, and additional companies will be put up for privatisation in the next fiscal year. “The private sector can run electricity distribution companies better,” he added.

The committee directed that Petroleum Division officials must attend the next meeting to address the gas-related concerns tied to the Nandipur plant and ensure smoother coordination across departments.