Options reviewed for PESCO takeover

In light of the instructions of the federal government, consultations have started on the proposal to run the Peshawar Electric Supply Company (PESCO) under the supervision of the Khyber-Pakhtunkhwa (K-P) government.

In this context, a special meeting was held under the chairmanship of Special Assistant to Chief Minister on Energy Engr Tariq Sadozai and PESCO Board of Directors Chairman Himayatullah Khan. Energy and Power Secretary Mohammad Zubair Khan, the Chief Executive Officers of PESCO and PEDO, and senior officers also attended the meeting.

Various options were considered regarding the privatization of PESCO or handing it over to the province.

The meeting was informed that PESCO was reportedly a loss-making distribution company which was facing an annual loss of Rs130 billion in terms of line losses and recovery.

For this purpose, various options were also discussed and experts' opinions were taken to run the company under the supervision of the provincial government.

Similarly, discussions were also held on facilitating the cooperation of the police along with the provincial and district administrations in the PESCO's recovery campaign.

Furthermore, in the meeting, a briefing was also given on the model of selling the electricity generated by PEDO's 1000 MW cheap hydropower projects to the industrial sector at low rates during the next two years.

At the end of the meeting, it was agreed that final recommendations would be made by setting up a task force to consider the option of handing PESCO to provincial custody.

Background

Last year in June, the federal government had decided to privatise the most efficient power distribution companies (DISCOs) while keeping two high loss-making entities with the state in an attempt to help them become financially healthy.

Moreover, a few less efficient DISCOs will be offered to investors under long-term concession agreements.

Now, it has agreed that the most efficient DISCOs will be sold in the first two phases whereas a few companies will be handed over to the private sector under long-term concession agreements.

Under Phase I of privatisation, three DISCOs, namely Islamabad Electric Supply Company (Iesco), Faisalabad Electric Supply Company (Fesco) and Gujranwala Electric Power Company (Gepco) will be sold to interested investors.

The three electricity supplying companies are considered to be the most efficient and are potentially thought to draw a lot of interest from private sector investors.

In the second phase of privatisation, Multan Electric Power Company (Mepco) and Lahore Electric Supply Company (Lesco) will be put on sale.

Three other DISCOs, which are located in K-P and Sindh, are suffering losses. In their cases, the government has planned to offer them to investors under long-term concession agreements.

The three companies include Hyderabad Electric Supply Company (Hesco), Peshawar Electric Supply Company (Pesco) and Sukkur Electric Power Company (Sepco).