The Competition Commission of Pakistan (CCP) has released a report outlining the challenges faced by the power sector, citing the extensive role of state-owned enterprises (SOEs) in the transmission and distribution sectors as a key hindrance to its development. The report, which assesses competition within the sector, notes that the dominance of SOEs has negatively impacted competition and efficiency.
To address these issues, the CCP has recommended significant reforms, including the opening of the power market and the adoption of the Competitive Trading Bilateral Contract Market (CTBCM) model. The report also calls for direct agreements between power producers and sellers for the purchase and transmission of electricity, urging the elimination of the intermediary role of the Central Power Purchasing Agency (CPPA).
The CCP further advocates for the separation of power production, transmission, and distribution, highlighting the need for urgent upgrades to the outdated power transmission system. The report also emphasizes the inefficiency of state-owned distribution companies (DISCOs), which suffer from line losses ranging from 9 to 35 percent. Privatization of these DISCOs is suggested as a solution to reduce losses and improve overall performance.
Additionally, the CCP recommends the immediate shutdown of outdated power plants to reduce capacity payments and the implementation of the Transmission Line Policy 2015. The commission also calls for increased private sector involvement in transmission infrastructure to boost efficiency.
CCP Chairman Dr. Kabir Ahmed Sidhu, at the launch of the report, stressed the importance of a competitive power sector in driving economic growth and providing affordable energy to consumers. He emphasized that implementing these recommendations could significantly improve the performance and sustainability of Pakistan’s power sector.
