ISLAMABAD : The Privatisation Commission (PC) has asked the Power Division to provide an update on the implementation status of Conditions Precedent (CPs)/ prior actions for the privatisation of Distribution Companies (DISCOs), including the recognition of various off-balance-sheet liabilities in accordance with applicable financial and corporate reporting requirements, sources told Newzshewz.
In a communication, the Privatisation Commission referenced a decision made by the Cabinet Committee on Privatisation (CCoP) on August 2, 2024, regarding the Privatisation Program (2024-2029), which was ratified by the Federal Cabinet on August 8, 2024. The approved program outlines the phased privatisation of DISCOs, either through equity sales and/or concession contracts.
The Privatisation Commission has stated that it understands the Power Division, in consultation with relevant stakeholders, is actively working to implement specific prior actions and Conditions Precedent (CPs) that must be fulfilled before the transactions can be launched in the market. Currently, the Privatisation Commission is in the process of finalizing the Financial Advisor for the privatisation of DISCOs in phase-1.
Sources have confirmed that the Privatisation Commission has requested the Power Division to provide updates on the following identified CPs: (i) notify licence eligibility criteria rules;(ii) notify licence eligibility regulations ;(iii) notify separate performance standards for distribution and supply( from existing standards) ;(iv) notify power acquisition/ power procurement regulations applicable to suppliers ;(v) modify and notify tariff rules to address uniform tariff ;(vi) modify current tariff guidelines to accommodate distribution licencee and supplier of last resort ;(vii) clarify subsidies for NEPRA consideration and in notifying tariffs ;(viii) notify guidelines on how DISCOs can request and recover subsidies ;(ix) clean up DISCO’s balance sheet ;(x) complete the process for issuance of shares in DISCOs ;(xi) develop future mechanism for timely payments against government dues (TDS, FATA/AJK, etc.) ;(xii) as per requirement of National Electricity Policy (NEP), efficient tariff structures for DISCOs may be awarded and DISCOs target may be revisited as stated in NEP;(xiii) as per requirement of NEP, the strategic road maps entailing commercial performance milestones may be developed for each DISCO;(xiv) as per NEP, the anti theft initiatives and recovery systems may be institutionalized in each DISCO with support of law enforcement agencies and provincial governments ;(xv) there are various off-balance sheet liabilities of DISCOs which need to be recognized as per applicable financial and corporate reporting legal requirements ;(xvi) define eligibility criteria for customers who can choose their supplier ;(xvii) licence regime of DISCOs is due to be changed after expiry of their existing validity till 2022 safeguarding the wire and retail business of DISCOs;(xviii) CTBCM is due to be effective soon impacting the exclusivity of DISCOs in their existing service jurisdictions ; and (xix) a confirmed timeline may be provided for full implementation of CTBCM.
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