KARACHI:
Officials said on Wednesday that the federal government is considering an initial public offering to sell shares in three high-performing state-owned electricity distribution companies as part of its efforts to fix financial challenges plaguing the debt-ridden sector.
The high rates of power theft and distribution losses in the country’s power industry have accumulated debts throughout the production chain, a worry shared by the International Monetary Fund (IMF).
Rasheed Langrial, Secretary of the Power division, recently told journalists in Islamabad, “Eventually, our way is through privatisation,” and that “serious thought” was being given to an initial public offering (IPO) for three firms.
More here: Federal control of DISCOs to be transferred to states.
These businesses, which he described as “high performing ones where there is high recovery of bills,” have headquarters in Islamabad, the country’s capital; the eastern cities of Gujranwala and Faisalabad; and Lahore.
Other state-run enterprises, he claimed, were losing a lot of money due to low recovery rates (caused by things like theft and line losses), so they would need to be prepared for privatization.
There are ten distributors in Pakistan, or DISCOs as they are known there.
A crackdown on electricity theft totaling Rs589 billion ($1.92 billion) has been announced by Mohammad Ali, the interim energy minister.
Pakistan’s determination to implement electricity sector reforms was important in securing a staff level agreement with the IMF, which released a $3 billion standby arrangement.
The International Monetary Fund has advocated for a “timely” rebasing of prices in the power industry to guarantee that costs are repaid. This involves charging consumers more despite historically high inflation.
