The Independent Power Producers are now looking for new fields to conquer, now that their cost capacity charge deals with the government have been snatched away and replaced by the need to produce electricity before they are paid. Kot Addu Power Company, one of the oldest IPPs, has not only formed part of one of the consortia bidding for PIA, but is also partnering with China’s largest electric vehicle manufacturers in assembling vehicles, but is partnering with PSO in sweating up EV charging stations along the Motorway. Now, it seems, other IPPs are also looking, but are remaining closer to their original area of expertise. The Senate Committee on Privatization was told that three power distribution companies, the Islamabad Electric Supply Company, the Gujranwala Electric Power Company and the Faisalabad Electric Supply Company, had to be sold by the wend of this fiscal year, that is to say by 30 June 2026. The earmarked DISCOs are loss-making; which is the position with other DISCOs, but these DISCOs are strategic for other reasons. IESCO services the federal capital, FESCO the textile units of Faisalabad, and GEPCO the tubewells of Punjab’s agricultural heartland
The latter two are under threat from so has shown decidedly mixed regular power, apart from the general adoption of that technology by residential consumers. A previous example of privatization, K-Electric (formerly KESC), but that might be the result of corporate infighting rather than anything else. K-Electric’s latest management team, which is still embroiled with the previous one, is willing to take on the challenge of solarization directly, and it remain to be seen how the new managements manage when the companies are privatised.
These privatizations will be significant because they will be the first utilities privatized after PTCL. The big difference is that landlines were fading out at that point, and the real attraction was in the new mobile technology, not so much the phone as the tower network Ufone had. In the same way, it is not so much the power distribution that will be interesting for buyers as the new technology.
As the PTCL sale illustrated, and as the PIA sale is showing, the private sector does not like to lose money. The enterprise may have to take a loss if state security is to be maintained, or to serve people who would otherwise be ignored. The privatization process is supposed to bring efficiency to enterprises which had for too long been used as much cows by successive governments.
