Senate panel questions proposed privatisation of power distribution companies

Senate panel raises concerns over power distribution privatisation

A Senate sub‑committee of the Functional Committee on Devolution met on Tuesday to scrutinise the federal government's proposal to privatise several power distribution companies (DISCOs). Chaired by Zamir Hussain Ghumro, the panel highlighted that the targeted DISCOs have achieved very high bill recovery rates – 100% in Islamabad, 98% in Faisalabad and 99% in Lahore – and questioned the timing of the privatisation drive.

Constitutional and devolution issues

The committee reminded the government that electricity distribution falls under provincial jurisdiction as per Article 157 of the Constitution. It argued that any decision on privatisation should be taken within the constitutional framework of devolution and be referred to the Council of Common Interests (CCI) for fresh consideration. The matter had previously been examined by the CCI in 2011, but the panel noted that the CCI has been reconstituted several times since then, making a new review necessary.

Recommendations and broader governance concerns

The Senate panel recommended that the privatisation proposal be sent back to the CCI for a renewed decision. It also called for the removal of 24 federal ministries and institutions that deal with subjects now devolved to the provinces under the 18th Amendment, labeling them a financial burden. The committee directed the Cabinet Division to brief Prime Minister Shehbaz Sharif and submit a compliance report within two weeks.

Additional observations

- The panel urged the Establishment Division to transfer police‑related service matters to the provinces, reflecting the shift of policing to provincial authority. - It pressed for full implementation of provincial rights over mineral oil and natural gas under Article 172(3). - Concerns were raised about the lack of provincial nominations to the board of Pakistan Petroleum Ltd (PPL), suggesting a possible breach of privilege. - The committee was briefed that six Thar coal‑based power plants are now operational, with four running entirely on Thar coal and the remaining two using it for a portion of their fuel mix.

Outlook

The Senate’s intervention introduces uncertainty around the timeline and structure of any privatisation of power distributors, potentially affecting investor sentiment toward the power sector on the Pakistan Stock Exchange.