ISLAMABAD: The federal government has shared with the International Monetary Fund (IMF) that transactions of two distribution companies (DISCOs) will be finalized by the end of January 2025.
Additionally, the government has admitted to missing the planned privatization of Pakistan International Airlines (PIA) and Faisalabad Electric Supply Company (FESCO).
In the report titled “2024 Article IV Consultation and request for an Extended Arrangement under The Extended Fund Facility” the government pointed out that the Cabinet ratified the Cabinet Committee on Privatization’s decision to move forward with these arrangements in June 2024 and the report claimed that it was moving forward with plans to privatize PIA (and anticipate completion of the transaction by end-August 2024), the Roosevelt Hotel, First Women’s Bank, HBFC, and several DISCOs and GENCOs.
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In addition, the government committed, with the help of the Technical Advisor, to complete all policy actions needed to prepare two DISCOs for transactions by end-January 2025 (structural benchmark), including the updating of tariff guidelines to align with DISCOs’ supply and distribution licenses, deciding on the treatment of existing DISCO employees and launching a communications campaign to inform the public of government’s plans.
And pledged to “issue a Request for Proposals (RfP) for the first DISCO concession by end May 2025 and the RfP for the first DISCO privatization by end-September 2025.”
The government will prioritize the privatization of commercial state owned entities (SOEs), including with the highest priority on profitable commercial SOEs, to reduce the government’s footprint in the commercial space and attract investments that can contribute to Pakistan’s development.
Copyright Business Recorder, 2024
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