Senate panel questions proposed privatisation of power distribution companies

A Senate panel has raised questions over the proposed privatisation of power distribution companies (DISCOs), pointing to the strong recovery rates of some major utilities and recommending that the matter be reconsidered by the Council of Common Interests (CCI).

 

The Sub-Committee of the Senate Functional Committee on Devolution, chaired by Zamir Hussain Ghumro, observed that the federal government was moving ahead with plans to privatise distribution companies under its control despite recovery rates reaching 100% in Islamabad, 98% in Faisalabad and 99% in Lahore.

 

Officials informed the committee that the issue had previously been taken up by the CCI in 2011. Ghumro questioned whether that earlier decision remained relevant, while Senator Jan Muhammad Buledi noted that the CCI had been reconstituted several times since then.

 

The committee recommended that the proposed privatisation plan be sent back to the CCI for fresh consideration, stressing that electricity distribution matters should be addressed in accordance with the constitutional framework governing devolution.

 

Referring to Article 157 of the Constitution, Ghumro said provincial governments have powers concerning electricity distribution within their respective territories, including matters related to tariffs, consumption taxes, power plants and grid stations.

 

The panel also criticised the continued operation of 24 federal ministries and institutions dealing with subjects devolved to the provinces under the 18th Constitutional Amendment.

 

Members unanimously rejected the Cabinet Division’s argument that these bodies were necessary for coordination and meeting international obligations, noting that the same justification had already been rejected during an earlier committee meeting.

 

Ghumro said retaining the 24 ministries and institutions at the federal level was placing a significant financial burden on the government. He cited federal expenditure of approximately Rs19 trillion against combined tax and non-tax revenues of around Rs20 trillion.

 

The committee directed the Cabinet Division to bring the issue to the attention of Prime Minister Shehbaz Sharif and submit an updated compliance report. It also maintained that only ministries dealing with genuinely federal responsibilities should remain under the Centre and sought compliance within two weeks.

 

The panel further instructed the Establishment Division to transfer police-related service matters to the provinces, noting that policing had become an exclusively provincial responsibility after the relevant entry was removed from the Concurrent Legislative List.

 

The committee also called for implementation of provincial rights under Article 172(3), particularly the provinces’ equal and joint ownership of mineral oil and natural gas.

 

Members expressed serious concern over the reported failure to obtain provincial nominations for the board of directors of Pakistan Petroleum Limited (PPL), describing the issue as potentially amounting to a breach of privilege.

 

Separately, the committee was informed that six Thar coal-based power plants are currently operational. Four plants are operating entirely on Thar coal, while the remaining two are using Thar coal for 33% and 20% of their respective fuel requirements.