The government has decided to privatize Lahore Electric Supply Company (LESCO) and Multan Electric Power Company (MEPCO) in their existing form, abandoning a proposal to split the two large electricity distribution companies into smaller entities before their sale.
The decision was taken after a Technical Committee constituted by the Privatization Commission reviewed the feasibility of dividing LESCO and MEPCO into two or three separate distribution companies. The committee concluded that bifurcation would delay the privatization process and recommended proceeding with both companies in their current structure.
The committee was headed by Sajid Akram, Advisor for Power at the Privatization Commission. It included officials from the Privatization Commission, Power Division, National Electric Power Regulatory Authority and Power Planning and Monitoring Company. It was tasked with assessing the benefits and drawbacks of restructuring the companies in the context of the National Electricity Plan, Power Policy and the ongoing privatization program.
The Privatization Commission has also decided to appoint a Financial Adviser for private sector participation in LESCO and MEPCO. It has invited interested firms and consortiums with relevant transaction experience to participate in the process and has made the Request for Proposal package available.
MEPCO is the country’s largest distribution company by consumer base, serving approximately 8.76 million consumers across 13 administrative districts of southern Punjab. Its network includes more than 82,000 kilometers of distribution lines and over 780 grid stations.
LESCO serves around 7.05 million consumers across Lahore and adjoining districts, including Kasur, Sheikhupura, Nankana Sahib and Okara. The company operates through eight operation circles and 41 divisions.
Both companies, however, continue to face challenges related to electricity theft, line losses and recoveries. Their performance has remained comparatively weaker than some other distribution companies in Punjab, according to the report.
LESCO has been pursuing system modernization through measures including Advanced Metering Infrastructure and digital billing, with a target of converting its consumer base to smart metering by 2029. MEPCO has similarly focused on grid modernization, smart metering and digital billing to improve recoveries, transparency and customer service.
According to FY2024 to 25 audits, the overall performance of both companies remained unsatisfactory. The decision to privatize them without prior restructuring is expected to help the government avoid the additional administrative work and delays associated with bifurcation and allow the privatization process to move forward in their existing form.
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