ISLAMABAD: The board of the Privatization Commission has endorsed critical recommendations that will be presented to the Cabinet Committee on Privatization, bringing the process of privatizing the DISCOs closer to its realization. This is a huge step forward in the ongoing struggle of the government to transfer the management of electricity distribution companies, which are making losses, to the private sector.

Board Meeting and Key Decisions Privatization of Power DISCOs

The board meeting of the Privatization Commission was chaired by Muhammad Ali, who is an adviser to the prime minister on privatization as well as chairman of the Privatization Commission. The board recommended that the Cabinet Committee on Privatization (CCoP) should approve the restructuring of three firms involved in the current phase of privatization; Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO) and Islamabad Electric Supply Company (IESCO).

The restructuring program and scheme of arrangement being used in the privatization of the power DISCOs have been prepared on the basis of audited financials of the three companies till the end of March 31, 2026. According to the officials, the suggested structure has been crafted in such a way that it delivers maximum value to the Government of Pakistan but is still commercially viable for potential investors from the private sector.

One of the strategies being used in this restructuring process is to create an SPV through which selected assets and liabilities will be separated from the three DISCOs prior to privatization. The main objective behind this strategy is to make the whole deal easier and commercially feasible. This is because bundling up all assets and liabilities together might drive away buyers who do not want to inherit these liabilities.

The board was made aware of the interest shown by both local and foreign investors in regards to the privatization of power DISCOs, a good sign that may help strengthen the government’s resolve to move ahead with the deal. Submission deadlines for Expressions of Interest (EOIs) have been set for August 7, 2026, in the case of FESCO, August 21, 2026, for GEPCO, and September 7, 2026, for IESCO.

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The other piece of news is that the board has also approved the creation of two transaction committees that will be responsible for the outsourcing of operations at the Islamabad, Lahore, and Karachi airports. The Asian Development Bank has been appointed as the financial advisor for the outsourcing of the Islamabad International Airport, while the advisors for the Lahore and Karachi airports are yet to be selected.

The board has also given approval for the appointment of RSM Avais Hyder Liaquat Nauman, Chartered Accountants, as the auditors for privatization transactions done in financial years 2024-25 to 2026-27. These audits will be done separately for each privatization transaction completed, whereas BDO Ebrahim & Co., Chartered Accountants, who have been appointed previously through a tender process, will be auditing the annual financial statements of the Privatization Commission for financial years 2025-26 to 2027-28.

However, the Board has reiterated its determination to carry out the government’s privatization strategy in a competitive, transparent and professional manner, so as to foster efficiency, attract private investments, and ensure maximum benefit to the government and the citizens of Pakistan. The success of the efforts for privatization of power DISCOs is going to depend largely on how well the government manages to handle the issues related to investors’ confidence and the worries of the employees working at DISCOs who have threatened to stage demonstrations against the privatization scheme.