Key Takeaways
- The Ministry of Privatisation has formed a Technical Committee to explore bifurcating LESCO and MEPCO.
- Both companies have weaker performance compared to other DISCOs in terms of theft, losses, and recovery.
- The move aims to improve the efficiency and financial viability of these distribution companies.
The Ministry of Privatisation has constituted a Technical Committee to evaluate the feasibility of bifurcating Lahore Electric Supply Company (LESCO) and Multan Electric Power Company (MEPCO) into smaller distribution companies prior to their privatisation. The decision comes amid concerns over the performance of these two entities, which are among the largest DISCOs in Punjab.
The Technical Committee is chaired by Sajid Akram, Advisor (Power), Privatisation Commission, and includes Ghulam Rasool from the Power Division, Imran Hafeez from NEPRA, and Abid Lodhi from PPMC as members. The committee will assess whether splitting these companies could enhance their operational efficiency and financial performance.
According to sources, both LESCO and MEPCO have faced challenges in terms of theft, losses, and recovery rates, making them weaker performers compared to other DISCOs in Punjab. MEPCO, a public unlisted company incorporated in 1998, serves approximately 8.76 million customers across Southern Punjab, while LESCO supplies electricity to around 7.05 million consumers in Lahore and adjoining districts.
MEPCO operates under a permanent distribution licence granted by the National Electric Power Regulatory Authority (NEPRA) and is governed by a Board of Directors supported by four sub-committees. The company’s focus areas include grid modernisation through Advanced Metering Infrastructure (AMI) and digital billing systems to improve transparency and customer service.
LESCO, on the other hand, began operations as a public limited company in 1998 and has been working on modernising its systems by introducing AMI. However, it faces challenges such as shortages of transformers and meters, which have delayed new connections and replacements. The company is also addressing issues related to complaint handling mechanisms and expanding digital billing services.
The performance of both DISCOs was unsatisfactory according to recent audits for FY2024-25. The Ministry’s decision to explore bifurcation aims to address these challenges by potentially creating more manageable units that can operate more efficiently and effectively.
While the exact structure of any potential new companies is yet to be determined, the move reflects a broader effort within the government to improve the performance and competitiveness of Pakistan’s DISCOs. The Technical Committee will present its findings in due course, which could pave the way for significant changes in how these critical services are managed.
