Loss-making Discos told to put house in order

ISLAMABAD: The federal government on Monday censured the managements and boards of directors (BoDs) of three state-owned loss-making power distribution companies (Discos) from Sindh and Balochistan for poor performance and directed them to immediately correct course.

In separate letters to the chief executives and BoDs chairmen of the Sukkur, Hyderabad and Quetta electric supply companies, the power division of the Ministry of Energy deplored that all targets for loss reduction and recoveries set by the power regulator as well as committed between the government and the Discos were missed.

Informed sources said the letters were issued after a performance review meeting of all Discos at a meeting presided over by power minister Awais Ahmed Khan Leghari.

The meeting appreciated the Discos from Islamabad, Gujranwala, Faisalabad and Multan for outperforming their targets for the period ending March 31, 2025 and congratulated their managements and boards.

Action plan sought from Sukkur, Hyderabad and Quetta power supply companies

The meeting also expressed satisfaction over the performance of Lahore and Peshawar-based Discos for achieving their targets and hoped they would do better. The meeting, however, noted with displeasure the continuous poor performance of three remaining Discos — Hesco, Sepco in Sindh, and Qesco in Balochistan.

In similar letters to Sepco, Hesco and Qesco, the power division expressed “grave concern that the performance of (these Discos) with respect to transmission and distribution losses and recovery remains well below the targets agreed upon between the power division” and the respective Discos, as well as the performance benchmarks set by the National Electric Power Regulatory Authority (Nepra).

“This persistent underperformance is a matter of serious concern and is adversely impacting the overall financial sustainability of the power sector and reflects very poorly on the affairs of state-owned enterprises,” the letter said.

It noted that this continued shortfall in recovery and high T&D losses not only reflected poor administrative performance but also exacerbated the circular debt situation, placing additional strain on the national exchequer.

“Despite repeated instructions and the availability of various support mechanisms, the inability of these Discos to meet even the minimum recovery benchmarks is unacceptable and undermines the broader reform efforts underway in the power sector,” the power division said.

It expressed concern that in case the current trend continued, there was a strong likelihood that the T&D and recovery targets set till June 2025 may not be achieved, which called for immediate and focused corrective measures from the management and the board equally.

The power division directed these three entities to take immediate corrective measures to improve performance and ensure strict compliance with the agreed targets and Nepra benchmarks. “A detailed action plan along with timelines may also be submitted to this office within seven days,” it ordered.

Published in Brackly News, April 8th, 2025