CCP issues report on state of competition in power sector: Discos asked to strengthen MIRAD for better business planning
- Report highlights significant presence and impact of state-owned enterprises on competition within the power sector
ISLAMABAD: The Competition Commission of Pakistan (CCP) has recommended Power Distribution Companies (Discos) to strengthen their Market Implementation and Regulatory Affairs Department (MIRAD) to enhance business planning, aligning with long-term goals for a competitive market.
The CCP on Friday released its detailed research report titled “State of Competition in the Key Markets in Pakistan: Power Sector.” The report highlighted the significant presence and impact of state-owned enterprises (SOEs) on competition within the power sector, offering strategic insights for fostering a more competitive market environment.
Chairman of CCP, Dr Kabir Ahmed Sidhu, in his message emphasized the critical role of a competitive power sector in driving economic growth and ensuring affordable energy for consumers.
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“This report is a testament to the CCP’s commitment to promoting fair competition and addressing market inefficiencies in every sector of the economy,” he stated.
The report outlines the structural, regulatory, and strategic challenges faced by the Pakistan’s power sector, which has long been dominated by SOEs.
The report included the CCP’s comprehensive recommendations to address multiple challenges facing the power sector. These recommendations aim to remove barriers to entry, reduce inefficiencies, and create a fair marketplace that encourages private sector participation alongside SOEs.
The key findings of the report included that dominance of SOEs in transmission and distribution segments leave hardly any space for private entities, thus create entry barriers, limiting market dynamics.
The CCP said that high capital requirements, monopolistic structures, outdated infrastructure, and geographical challenges hinder new market entrants.
The CCP has recommended implementation of the Competitive Trading Bilateral Contracts Market (CTBCM) model, infrastructure investments, and revised tariff policies are among the strategies suggested to stimulate competition.
The CCP envisions this report as a catalyst for policy discussions, collaboration among policymakers, industry stakeholders, and regulatory bodies to foster a competitive and efficient power sector.
Copyright Business Recorder, 2024
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