Disinfecting Discos

What is another epic failure of PML-N's experienced team; the government has decided to change the mode of privatisation of public power distribution companies.

Late last week, the Minister for Planning, Development and Reforms, Ahsan Iqbal was reported saying that the sell-off of distribution companies will discourage investment at this stage. This column is still trying to figure out how exactly a sell-off would discourage investment, but another big question is how exactly will selling off small stakes via the stock market will encourage investment?

The logic being pushed by capital market pundits goes as follows: listing power discos at the exchange change is akin to putting them under the sunlight, and sunlight is a great disinfectant. Then again, Pakistan International Airline has been under the sunlight for more than a decade; likewise, the KESC (now K-Electric) was under the sunlight and yet it failed to turnaround until years after it was privatised.

The only benefit of listing these firms at the exchange is that their accounts will be available to the public at large - which would have been available to the public in any case, if the government was any serious about the PSE reforms and the implementation of PSE corporate governance in letter and spirit.

In any case, it is not as if the government plans to sell the stakes in ill performing PSEs; the plan is to sell shares in FESCO and LESCO - the profitable and most efficient ones. Those that are suffering the most from T&D losses will continue to remain out of the so-called sunlight and therefore remain infected.

In the final analysis, the governments whole privatisation strategy so far - be it the case of UBL, PPL or the forthcoming discos - is only aimed at filling its kitty. Its about the money and money alone. Its not about economic principles, not about service delivery of the organisation, and surely not about putting taxpayers money to good use.

Then again anybody watching the state of affairs knew that already anyways!