DISCOs fail to slash losses

Pakistan's economic managers have expressed serious concerns over the newly appointed boards of power distribution companies (DISCOs), which have failed to meet loss reduction targets.

The Economic Coordination Committee (ECC), in a recent meeting, voiced grave concern that the targets assigned to DISCOs regarding reduction in transmission and distribution (T&D) losses had not been met. Specifically, the ECC members noted that the losses of Lahore Electric Supply Company (Lesco) had increased over the year. They stressed the need to adopt a robust plan to reverse the trend.

The members of the economic decision-making body also underlined the need to make interventions to improve operations of the public power utility and slash losses.

During discussions, the ECC was informed that boards of directors of all DISCOs, except for Hyderabad Electric Supply Company (Hesco) and Sukkur Electric Power Company (Sepco), had been reconstituted.

It was also noted that under the oversight of the newly reconstituted boards, the entities had shown signs of improvement. The ECC was informed that Pakistan Power Management Company (PPMC), being the technical arm of the Power Division, was regularly monitoring the performance of DISCOs.

In line with the National Electricity Policy, strategic roadmaps were formulated and signed in February 2025 by the respective chairpersons of the boards and the CEOs of all DISCOs.

These roadmaps outline plans for T&D/AT&C (aggregate commercial and technical) loss reduction, bill collection, theft prevention, load-shedding management, consumer services, safety compliance, Scada implementation, GIS mapping, ERP system automation, computerised energy audits up to the distribution transformer level, execution of service-level agreements (SLAs) and operation and maintenance (O&M) framework.

The Power Division briefed the meeting that to accomplish those objectives, a structured action matrix has been developed by DISCOs. This covers key initiatives such as feeder rehabilitation, distribution transformer addition/ augmentation, grid station expansion, capacitor installation, HT and LT line additions, transmission line upgrades, aerial bundled cable (ABC) deployment and advanced metering infrastructure (AMI) installation.

In light of the directive issued in the ECC meeting held on April 11, 2024, the status regarding the governance of all DISCOs whose boards had been reconstituted, with a view to improving governance, was submitted to the ECC in the form of a summary under Rule 18(1) read with Rule 23(4) of the Rules of Business, 1973.

Eleven DISCOs operate under the administrative control of the Power Division and are governed by the provisions of the State-Owned Enterprises (Governance and Operations) Act, 2023 and the State-Owned Enterprises (Operations and Management) Policy, 2023. The matters of boards of directors are also governed under the aforementioned law and policy.

The boards of Faisalabad Electric Supply Company (Fesco), Islamabad Electric Supply Company (Iesco), Lesco, Multan Electric Power Company (Mepco) and Hazara Electric Supply Company (Hazeco) were reconstituted on July 24, 2024. Moreover, the boards of Gujranwala Electric Power Company (Gepco), Peshawar Electric Supply Company (Pesco), Quetta Electric Supply Company (Qesco) and Tribal Areas Electric Supply Company (Tesco) were reconstituted on August 31, 2024.

Summaries for the reconstitution of Hesco and Sepco boards, with appropriate representation of independent and ex-officio directors as per relevant provisions of the State-Owned Enterprises (Governance and Operations) Act, 2023 and State-Owned Enterprises (Operations and Management) Policy, 2023, were submitted to the Prime Minister's Office.

The boards of all DISCOs have been reconstituted, except for Sepco and Hesco, where the process is in the finalisation stage. The reconstituted boards are structured to ensure enhanced corporate governance, strategic oversight and operational efficiency.

PPMC has implemented a monthly performance monitoring mechanism for all DISCOs, evaluating key operational, commercial and financial parameters. This framework ensures accountability and alignment with the sector's strategic goals.