In a significant move to address the longstanding issues of mismanagement and financial losses in electricity distribution companies, the Federal Cabinet is gearing up to transfer control of five major DISCOs (Distribution Companies) to the Pakistan Army. According to insider reports, this decision aims to enhance the performance of the troubled companies and bring about a positive change in their operational efficiency.
The cabinet is expected to approve the establishment of Performance Management Units (PMUs) under the supervision of a serving brigadier of the army. These PMUs will not only be comprised of military personnel but also include officers from the Pakistan Administrative Service, Federal Investigation Agency, and various intelligence agencies.
The selected DISCOs for this initiative are QESCO (Quetta), PESCO (Peshawar), SEPCO (Sukkur), MEPCO (Multan), and HESCO (Hyderabad), all of which have recorded the highest losses nationwide. As a pilot project, the first PMU will be established in Hyderabad.
However, this move has encountered opposition from within the government. The finance division, in particular, has raised objections, expressing concerns that the proposal to place army officers in control of the companies was not initially endorsed by the Special Investment Facilitation Council (SIFC) and was added later.
Originally, the SIFC proposed an Anti-Theft Taskforce for each struggling DISCO. Still, the power division’s recommendation shifted towards the establishment of PMUs managed by army officers. The finance division argues that such a measure could further deteriorate governance within the distribution companies.
Moreover, the finance division has raised concerns about the lack of clarity in the Terms of Reference (ToRs) and Key Performance Indicators (KPIs) for the PMUs headed by army officers. Despite these objections, the proposal is likely to move forward.
The DISCOs are projected to incur losses of Rs589 billion in the current financial year, contributing to a circular debt that has already reached a staggering Rs1.7 trillion. The government continues to grapple with the challenge of addressing mismanagement issues within these companies, and this latest move signals a bold attempt to bring about much-needed reforms.
