PAC seeks certified valuation of DISCOs assets, proposes halt to privatisation

ISLAMABAD: The Public Accounts Committee (PAC) has sought certified valuation and tagging of assets of power distribution companies (DISCOs) before proceeding with their privatisation, expressing concern that the government could sell billions of rupees’ worth of assets at substantially undervalued prices.
The committee, while reviewing audit objections of the Power Division for financial year 2024-25, directed the Power Division to submit within three months a certified valuation of DISCO assets and a comprehensive plan regarding the future of employees.
The PAC also proposed suspending the privatisation process until the actual value of assets is established through proper tagging and revaluation.
During the meeting, audit authorities disclosed that DISCOs had failed to undertake tagging of assets worth Rs624 billion, raising concerns about possible theft, misappropriation and difficulties in determining the actual value of assets ahead of privatisation.
Audit officials maintained that the absence of asset tagging could create complications in the privatisation process and prevent the government from obtaining a fair price for public assets.
They emphasised that tagging and revaluation of DISCO assets were essential before privatisation, warning that otherwise the government could be deprived of their actual market value.
Responding to the concerns, Power Division officials informed the committee that DISCOs had hired private firms for asset tagging, while work on asset valuation was underway, with approximately 40 percent of the exercise completed.
However, the Auditor General observed that the financial year had already ended in June, but the companies had yet to complete their asset valuation.
He warned that proceeding with privatisation at this stage would mean selling the companies on the basis of financial figures relating to the previous financial year.
The Auditor General stressed that the process should be halted until certified and actual values of assets were available.
Power Division officials, however, clarified that the privatisation process was being handled by the Privatisation Commission and did not fall within their direct mandate.
They suggested that the Privatisation Commission should be summoned to brief the committee on the matter.
Senator Afnanullah Khan stated that the value of DISCOs’ land alone ran into trillions of rupees, while Senator Manzaha Hassan expressed concern that valuable public assets were being sold at throwaway prices.
Senator Afnanullah clarified that DISCO land was not being privatised and would instead be leased out. He also questioned why Quetta was not included in the list of companies being considered for asset tagging, to which Power Division officials responded that Quetta and Tribal Electric Supply Company were not being privatised.
Minister for Parliamentary Affairs Dr Tariq Fazal Chaudhry proposed that the Adviser to the Prime Minister on Privatisation be summoned to brief the committee on the DISCO privatisation process.
He also suggested that, if considered appropriate, the PAC could summon chief executives of the distribution companies to explain the status of asset tagging and valuation.
The committee also discussed the digitisation of the power sector and measures being introduced to improve electricity recovery and curb losses.
Secretary Power informed the PAC that the entire power sector system was being digitised and that electricity disconnections for defaulters would henceforth be carried out at transformer level instead of feeders.
Power Division officials informed the committee that advanced power control (APC) meters would be installed on transformers to facilitate monitoring and disconnection of electricity supplies to defaulters.
Under the proposed pilot project, ten transformers in each DISCO would be equipped with APC meters by December, while the complete installation programme was expected to be finalised by June 2027.
The committee also expressed concern over the performance of major hydropower projects, particularly the Neelum-Jhelum Hydropower Project and the Tarbela 5th Extension Project.
Senator Afnanullah Khan questioned the repeated problems faced by major power projects, stating that Neelum-Jhelum remained closed while the Tarbela 5th Extension Project had suffered significant losses following the recent tunnel incident.
He questioned how major projects could be planned and executed without ensuring the accuracy of designs and asked who would be held responsible for such failures.
The PAC stressed the need for accountability and proper assessment of losses arising from incidents at major hydropower projects.