After reservations were expressed by the ministry of water and power over the valuation of the distribution companies (DISCOs) on the privatisation list, the government has decided to revisit its privatisation policy and instead of complete privatisation of these entities only some of their operations will be outsourced.
An informed source said the Privatisation Commission has been tasked to re-evaluate the DISCOs and propose and identify operations which could be privatised. The decision was made after the ministry pointed out that the valuation of real estate of DISCOs was based on the 1992 report when power sector was separated from WAPDA.
The ministry argued DISCOs had real estate assets worth billions of rupees. Like PTCL, many of the properties were not in DISCO’s name. It was pointed out that if an investor takes over a DISCO he might be tempted to dispose of the expense real estate that have no direct link with the company’s core operations.
The head offices of DISCOs and their hospitals are prime real estate properties. Many of the grid stations like F-6 are located in most costly residential areas. Privatisation of complete DISCOs will allow handing over these lucrative properties to investors who could make handsome return on their investment.
Since the ministry of power opposed complete privatisation of DISCOs, it was decided to have a fresh look on the privatisation in the power sector. The source said that from next financial year the government was likely to outsource operation and maintenance of all the DISCOs. The areas having low recovery and poor law and order situation would be outsourced to the private sector, he said, adding that all these things had been agreed with the international financial institutions as well.
Keeping the gem and selling trash ain't gonna work. Disco's like Genco are full of trash which cannot be put to better use. Privatization is the only solution.
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