The Competition Commission of Pakistan (CCP) has expressed concerns that the substantial involvement of state-owned enterprises (SOEs) in the transmission and distribution sectors is impeding the development of the power sector.
A CCP report on competition in the power sector highlights the dominant role of SOEs and its detrimental impact on sectoral competition. The report advocates for the government to deregulate the power market and implement the Competitive Trading Bilateral Contract Market (CTBCM) model, allowing direct transactions between power producers and distributors.
The CCP also suggests eliminating the intermediary role of the Central Power Purchasing Agency (CPPA) and recommends that the National Electric Power Regulatory Authority (NEPRA), which approved the CTBCM model in 2020, support this transition.
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Further recommendations include the separation of power production from transmission and distribution to enhance operational efficiency. The report calls for urgent upgrades to the outdated power transmission systems and proposes shutting down obsolete power plants to reduce capacity payment burdens. It also encourages the implementation of the Transmission Line Policy of 2015 and invites private sector participation in transmission infrastructure.
Highlighting inefficiencies in current operations, the report notes that state-owned distribution companies suffer from 9% to 35% in line losses, suggesting that privatization could significantly reduce these losses. The CCP emphasizes that privatizing distribution companies (DISCOs) could address these inefficiencies by shifting the financial burden away from more efficient entities.
At the report’s unveiling, CCP Chairman Dr. Kabir Ahmed Sidhu emphasized the vital role a competitive power sector plays in fostering economic growth and ensuring energy affordability for consumers.
