Six Member Committee Formed to Oversee Privatization of Key Power Companies

The Power Division has established a six-member committee to oversee the ongoing privatization of Islamabad Electric Supply Company (IESCO), Faisalabad Electric Supply Company (FESCO), and Gujranwala Electric Power Company (GEPCO).

According to an official notice from the Power Division, Muhammad Khalid Khan, Joint Secretary (CAD) of the Power Division, will lead the committee as its convener. Other committee members include Ghulam Rasool Anjum, Joint Secretary (P) of the Power Division; Kamran Farooq Ansari, Director General (I&T/P&U) of the Privatisation Commission; Abdul Basit Abbasi, Consultant at the Privatisation Commission; Anton Avajansky, Managing Director of Alvarez & Marsal; and Alexander Sivolobov, Senior Director at Alvarez & Marsal.

The committee has been granted the authority to include additional members if necessary, particularly from the Finance Division, Pakistan Power Management Company (PPMC), Central Power Purchasing Agency (CPPAG), and the relevant distribution companies (DISCOs).

This newly formed committee will take on multiple key roles, including ensuring coordination among stakeholders, tracking weekly progress in the due diligence process, assisting the financial advisor with data collection from DISCOs, and resolving any issues that arise during the privatization process. It will also be responsible for escalating any challenges to the Project Oversight Committee.

Moreover, the committee will be tasked with addressing both operational and strategic challenges that may arise throughout the privatization process.

On February 13, 2025, the Privatisation Commission issued a letter to the CEOs of FESCO, GEPCO, and IESCO, directing them to comply with specific conditions during the privatization process.

The Privatisation Commission, established under the Privatisation Commission Ordinance, 2000, is responsible for executing the government’s privatization agenda. In line with a decision by the federal cabinet on August 13, 2024, FESCO, GEPCO, and IESCO were included in Phase-I of the Privatisation Programme (2024-29). Alvarez & Marsal Middle East Limited, based in Dubai, UAE, has been appointed as the Financial Adviser to help facilitate private sector involvement in these DISCOs.

To ensure a smooth transition and prevent financial mismanagement, the Privatisation Commission has imposed several restrictions on the DISCOs. No new hires will be allowed, except for positions vacated by resignation or retirement, unless approved by the Commission. Promotions or new incentives for employees, unless already granted before the directive, are also prohibited without prior approval. Additionally, no new agreements that might create financial or legal obligations can be made without the Commission’s consent.

The DISCOs must keep their business records and accounts up-to-date. Any actions leading to asset loss or waste are prohibited, and any new liabilities, beyond regular business, will require prior written approval. Furthermore, the sharing of any information that could benefit third parties or potential buyers is strictly forbidden. The directive also prevents actions that could spark industrial unrest, and any significant administrative, financial, or policy decisions impacting operations must have the Commission’s approval.

The CEOs of FESCO, GEPCO, and IESCO have been directed to circulate these directives within their administrative units to ensure compliance. They are also required to submit a report on the implementation of these instructions to the Privatisation Commission.

Under the Privatisation Commission Ordinance, 2000 (as amended in September 2024), the Commission is responsible for overseeing privatization efforts, including restructuring, deregulation, and regulatory matters such as licensing and tariffs. It also ensures compliance with directives to avoid financial mismanagement and prevent actions that may cause industrial disruptions.

The newly formed six-member committee is expected to play a key role in facilitating the privatization process, ensuring transparency, and resolving challenges as they arise. The committee will also review the fact-finding report, which is expected to be presented to the cabinet in March 2025.