ISLAMABAD - Pakistan is privatising only profit-making power distribution companies in the first phase, with the most profitable Disco, Faisalabad Electric Supply Company (FESCO) likely to be sold in the next few months.

The PML-N government had so far privatised the profit-making institutions like HBL, UBL, ABL, Pakistan Petroleum Limited and National Power Construction Company. The government had generated $1.7 billion through privatization since coming into power in June 2013. Although the government had made attempt to sell loss-making Heavy Electrical Complex (HEC), but it failed to do so as buyer gave bogus cheque to the government. The Senate Standing committee on Finance and Revenue had already showed reservations over the government’s policy of privatising the profitable entities instead of selling the loss-making public sector entities.

However, the government said it is privatizing all 68 public sector entities approved for sell-off by Council of Common Interest (CCI) in 2011. “There are 25 entities on the active list of the privatization, which included profitable as well as loss-making entities like Pakistan International Airlines (PIA) and Pakistan Steel Mills (PSM),” said an official of the Privatization Commission while talking to The Nation.

According to the documents, three most profitable power distribution companies including Faisalabad Electric Supply Company (FESCO), Lahore Electric Supply Company (LESCO) and Islamabad Electric Supply Company (IESCO) would be privatized in the first stage. Meanwhile, loss-making power distribution companies including Multan Electric Power Company (MEPCO), Hyderabad Electric Supply Company (HESCO) and Peshawar Electric Supply Company (PESCO) would be privatized later. The profitable FESCO would be privatized in next few months. The Cabinet Committee on Privatization had approved the FESCO transaction structure on October 2, 2015. FESCO had earned profit worth Rs29.69 billion during previous year 2014 as against Rs24.05 billion of the preceding year 2013. FESCO has total assets worth Rs135.95 billion.

The government would privatize LESCO and IESCO after completing the privatization of FESCO. IESCO had earned profit of Rs22.66 billion last year 2014. The company has total assets worth Rs134 billion. Similarly, LESCO earned profit of Rs11.02 billion with assets of Rs180.1 billion during 2014.

However, the loss-making power companies like PESCO, SEPCO, HESCO and GEPCO would be privatized later. PESCO was in loss of Rs34.4 billion, SEPCO Rs14.81 billion, HESCO Rs12.73 billion and GEPSCO Rs 1.57 billion during the previous year 2014.

It is worth mentioning here that Pakistan had delayed its privatization programme for six months as agreed with the IMF. The strategic sales of electricity supplying companies of Faisalabad, Islamabad and Lahore, as well as the Northern Power Generation Company Ltd, have been delayed until end-September 2016 instead of their previous deadlines of December 2015 to June 2016. The divestment of shares in PIA, Kot Addu Power Company, Mari Petroleum and Pak-Arab Refinery has been postponed until end-June 2016 instead of December 2015.