The Cabinet Committee on Privatisation (CCoP) has approved a restructuring plan for three major electricity distribution companies — Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO) and Islamabad Electric Supply Company (IESCO).
The move is part of the government’s wider power sector reform plan aimed at making distribution companies financially sustainable, professionally managed and digitally enabled while improving electricity services.
Under the approved plan, selected assets, including all land parcels, will be transferred to a government-owned special purpose vehicle (SPV). Certain liabilities, including post-retirement benefits of employees who have already retired, will also be transferred to the SPV along with a significant amount of funds.
Post-retirement benefits for current employees will remain with their respective DISCOs.
Intergovernmental receivables and payables will also be netted as part of the restructuring to settle government-related claims.
The Privatisation Commission said the restructuring would be fiscally neutral and designed to increase value for the government while keeping the transaction viable.
The government said uninterrupted electricity services would remain a priority during the process, while employee interests would be protected under applicable laws and transaction arrangements.
Advisor to the Prime Minister on Privatisation Muhammad Ali said consumers would remain protected under Pakistan’s regulatory framework. He said electricity tariffs would continue to be determined through the National Electric Power Regulatory Authority (NEPRA) process and notified by the government.
The reforms, he added, would focus on improving electricity reliability, efficiency and customer service.
FESCO, GEPCO and IESCO collectively serve more than 14 million consumers across major industrial, commercial and urban areas.
The government said improving the performance of the three companies would be important for reducing electricity costs and providing more competitive power services to the economy.
The approval is the latest government move to address long-standing problems in the power distribution sector and prepare the companies for broader privatization and reform.
