ISLAMABAD : The Government of Punjab (GoPb) has reportedly linked its interest in acquisition of Punjab based power Distribution Companies (DISCOs) with complete financial picture by a Transaction Advisor, well informed sources told Newzshewz.
Prime Minister, Shehbaz Sharif had directed both the Privatisation Division and Power Division to explore both options i.e. privatisation and provincialisation of DISCO’s to complete the transaction by the end of current year.
Following the directives of Prime Minister, Secretary Power Division wrote letters to the four provinces, seeking their views on the proposal of provincialization of DISCOs of their respective provinces..
At a recent of Senate Standing Committee on Power, Secretary Power Fakhray Alam Irfan said that the provinces have not responded to his letters which implies that they are not interested in acquiring DISCOs.
However, sources have conformed that Sindh and Punjab have responded to the offer of federal government, but did not show any enthusiasm in acquiring DISCOs in their respective provinces. DISCOS in Punjab except MEPCO are performing far better than other provinces. Both DISCOs of Sindh are causing Rs 130 billion financial loss to the national exchequer pr annum.
Punjab Government, in its response has stated that earlier, in line with the decisions of the Cabinet Committee on Privatization (CCoP) of June 24,2022, the Provincial Cabinet, Punjab approved the hiring of a Transaction Advisor for necessary financial and strategic guidance for making an informed decision on the proposal for the provincialization of DISCOs. In the meantime, the Federal Government decided to privatize the DISCOs of Punjab in a phased manner, instead of their provincialization. Resultantly, the matter of hiring the Transaction Advisor in Punjab was halted.
The Punjab Government has further stated that now, it has been conveyed on January 08, 2025 that based on the decision of the Cabinet Committee on Privatization (CCoP), the privatization process of three DISCOs (IESCO, FESCO, and GEPCO) is currently at an advanced stage and they will be offered for privatization in the first phase. It has further been added that another option could be the provincialization of DISCOs through the transferring of ownership or long-term concession to their respective provincial governments, following due diligence processes. CCoP has also approved a long-term concession model for three other DISCOs.
According to an official of Energy Department of Punjab, he has been to state that the process of acquisitions/ divestitures of DISCOs would require the assistance of a Transaction Advisor to conduct due diligence, analyze financial data, identify potential risks, and assess the overall economic health of the Companies. Only thereafter will Punjab be in a position to render its comments on the Provincialization of DISCOs in Punjab.
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