Govt Picks Faster Route For LESCO And MEPCO Privatization

In practice, the administration has decided to privatize Lahore Electric Supply Business (LESCO) and Multan Electric Power Firm (MEPCO) in their existing form, abandoning a proposal to split the two substantial electricity distribution firms into smaller entities before their sale.

Key points

• LESCO serves around 7.05 million consumers throughout Lahore and adjoining districts, including Kasur, Sheikhupura, Nankana Sahib and Okara.
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• The committee was headed by Sajid Akram, Advisor for Power at the Privatization Commission.
• According to FY2024 to 25 audits, the overall performance of both firms remained unsatisfactory.
• MEPCO is the country's largest distribution firm by consumer base, serving approximately 8.76 million consumers throughout 13 administrative districts of southern Punjab.

For context, the decision was taken after a Technical Committee constituted by the Privatization Commission reviewed the feasibility of dividing LESCO and MEPCO into two or three separate distribution firms. The committee concluded that bifurcation would delay the privatization process and recommended proceeding with both firms in their current structure.

Meanwhile, the committee was headed by Sajid Akram, Advisor for Power at the Privatization Commission. It included authorities from the Privatization Commission, Power Division, National Electric Power Regulatory Authority and Power Planning and Monitoring Business. It was tasked with assessing the benefits and drawbacks of restructuring the firms in the context of the National Electricity Plan, Power Policy and the ongoing privatization program.

In practice, the Privatization Commission has additionally decided to appoint a Financial Adviser for private sector participation in LESCO and MEPCO. It has invited interested firms and consortiums with relevant transaction experience to participate in the process and has created the Request for Proposal package available.

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MEPCO is the country's largest distribution firm by consumer base, serving approximately 8.76 million consumers throughout 13 administrative districts of southern Punjab. Its network includes more than 82, 000 kilometers of distribution lines and over 780 grid stations.

LESCO serves around 7.05 million consumers throughout Lahore and adjoining districts, including Kasur, Sheikhupura, Nankana Sahib and Okara. The firm operates through eight operation circles and 41 divisions.

Both firms, even so, continue to face challenges related to electricity theft, line losses and recoveries. As the report notes, their performance has remained comparatively weaker than some other distribution firms in Punjab.

LESCO has been pursuing system modernization through measures including Advanced Metering Infrastructure and digital billing, with a target of converting its consumer base to smart metering by 2029. MEPCO has similarly focused on grid modernization, smart metering and digital billing to improve recoveries, transparency and customer service.

According to FY2024 to 25 audits, the overall performance of both firms remained unsatisfactory. The decision to privatize them without prior restructuring is projected to assist the administration avoid the further administrative work and delays associated with bifurcation and allow the privatization process to move forward in their existing form. Stay Connected with ProPakistani.

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For now, govt Picks Faster Route For LESCO And MEPCO Privatization remains the part of the story worth watching, and further updates are likely as more details are confirmed.