ISLAMABAD: The federal government is mulling over to hand power Distribution Companies (Discos) to respective provinces with their consent like other organisations devolved to provinces as per 18th Constitutional amendment, well informed sources in PM Office told Business Recorder.
On April 27, 2023, provincialisation of Discos came under consideration at a meeting, presided over by Special Assistant to the Prime Minister (SAPM) on Government Effectiveness, Dr Jehanzeb Khan.
According to sources, the SAPM briefly mentioned the constitutional arrangements of the power sector. He pointed out that electricity was included in the Concurrent List prior to 18th Constitutional Amendment which is now in Federal Legislature List part II; hence, jointly vested in the federation and the provinces.
Provincialisation of Discos: Either seek approval for pre-merger or grant exemption, CCP tells govt
He further stated that federal government devolved a number of organizations to the provinces consequent to the 18th Constitutional Amendment, adding that similar mechanism should be adopted for the Discos.
He maintained that the federal government through the Council of Common Interests (CCI) should agree, in principle, to transfer the Discos to any province willing to accept the responsibility. The modalities can be mutually worked out through respective transaction Advisors.
In February this year, Prime Minister Shehbaz Sharif decided to hold meetings with Chief Ministers to convince them to accept provincialisation of at least one Disco before placing the proposal before the CCI.
The sources said Punjab, Sindh and KPK showed a willingness to take over the control of Discos in their respective provinces subject to acceptance of their pre-conditions.
Prime Minister Shehbaz Sharif also constituted an 11-member committee comprising Khawaja Muhammad Asif, Minister for Defence (Chair), Khurram Dastgir Khan Minister for Power, Syed Naveed Qamar Minister for Commerce, Musadik Masood Malik Minister of State for Petroleum, provincial chief ministers and ministers nominated by CMs, Dr Muhammad Jehanzeb Khan, Special Assistant to the Prime Minister on Government Effectiveness, Finance Secretary, Secretary Power (Secretary of the Committee), Secretary Privatisation Commission, Secretary Law & Justice, Provincial Chief Secretaries, to finalize recommendations for provincialisation of Discos.
The sources said, Power Division, which is providing secretariat support to the Committee has sought comments of concerned stakeholders prior to giving final touches to the recommendations to be presented to the CCI.
Sharing its comments, Competition Commission of Pakistan (CCP) has advised the federal government to either seek its approval for pre-merger of Discos being provincialised or exempt it from CCP approval required under Section 54 of the Competition Act, 2010.
On April 7, 2023, Power Division wrote a letter to CCP wherein the former sought comments/ input on the working paper and timelines on provincialisation of Discos.
According to the CCP it is entrusted with the mandate of providing free competition in all spheres of commercial and economic activities, to enhance economic efficiency and to protect consumers from anti-competitive behaviour, i.e., abuse of dominant position, prohibited agreements (cartelization), deceptive marketing practices and merger that substantially lessen competition in the market.
The CPP argues that obtaining Competition Commission’s “pre-merger approval” under section 11 of the Competition Commission Act, 2010 “section 11 of the Commission Act, 2010” outlines the procedures and criteria along with the timelines for approving mergers and acquisitions by the Commission. The timeline for clearing merger is 30 days in case of first phase review and 90 days in case of second phase review.
Copyright Business Recorder, 2023
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