Govt to speed up LESCO and MEPCO privatization plan
Government chooses faster route
The government has decided to privatize LESCO and MEPCO in their existing structures instead of dividing them into smaller companies first.
The decision is expected to reduce delays and administrative work. A technical committee reviewed the proposal and found that splitting the companies could slow down the process.
The committee recommended moving ahead with LESCO privatization and MEPCO privatization without prior restructuring.
Committee reviews restructuring plan
The technical committee was formed by the Privatization Commission to study whether the two companies should be divided into two or three separate units.
The committee included officials from the Privatization Commission, Power Division, NEPRA and Power Planning and Monitoring Company.
It examined the possible benefits and disadvantages of restructuring under the National Electricity Plan, Power Policy and the ongoing privatization programme.
Officials concluded that bifurcation would create additional administrative work and delay the planned transactions.
Financial adviser to be appointed
The government will now move towards appointing a Financial Adviser for private sector participation in the two companies.
Interested firms and consortiums with relevant transaction experience have been invited to participate.
The move is expected to support the next stage of power sector privatization and help authorities prepare the companies for private investment.
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Millions of consumers affected
MEPCO is Pakistan’s largest distribution company by consumer base. It serves around 8.76 million consumers across 13 districts of southern Punjab.
Its network covers more than 82,000 kilometres of distribution lines and includes over 780 grid stations.
LESCO serves around 7.05 million consumers across Lahore and nearby districts, including Kasur, Sheikhupura, Nankana Sahib and Okara.
Together, these electricity distribution companies serve millions of households and businesses.
Challenges remain
Both companies continue to face problems involving electricity theft, line losses and weak recoveries.
Their performance has remained weaker than some other distribution companies in Punjab, according to the report.
LESCO has been working on smart metering, digital billing and system modernization, with a target of converting its consumers to smart meters by 2029.
MEPCO is also working on grid modernization and digital systems to improve recoveries and customer service.
The latest decision could make LESCO MEPCO privatization faster by avoiding the need to create separate companies before the sale.
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What happens next?
The government is now expected to focus on attracting private sector participation.
The decision could also help move electricity privatization Pakistan plans forward without waiting for a lengthy restructuring process.
However, investors are likely to closely examine the financial and operational condition of both companies.
The Pakistan power sector continues to face challenges related to losses, recoveries and electricity theft. These issues could play an important role in the future of power sector privatization.
