DISCOs: govt to adopt Turkish model

ISLAMABAD: Pakistan has decided to follow the Turkish model through outsourcing the management of power distribution companies (DISCOs) in an attempt to reduce losses, bring efficiency and attract investment. To adopt the Turkish model, the government of Pakistan has agreed with the International Monetary Fund (IMF) that it will engage a transaction adviser for long-term concessions by the end of April 2024. The World Bank has offered a grant-based technical assistance and risk guarantee instruments, which give greater confidence to the prospective private concession holders and their lenders. The International Finance Corporation has expressed interest in providing transaction advisory services. Sources revealed that policymakers were informed in a recent meeting of the Cabinet Committee on Privatisation (CCOP) that a long-term concession model had delivered the benefits of private sector participation in Turkey, Argentina, Brazil, Uganda and other countries. Policymakers noted that under such concessions, Turkey’s 20 DISCOs attracted a much larger private sector investment than under the public sector, ensured much better service quality for consumers and reduced losses by one-third in a decade.