PIA sell-off model floated for DISCOs

The Privatisation Commission (PC) board proposed on Tuesday the establishment of a new company to set aside some liabilities and assets of three power distribution companies (DISCOs) in line with the privatisation model used for Pakistan International Airlines (PIA), aiming to hand over the entities with positive equity to new buyers. According to the proposal, the government plans to separate land as an asset and the liabilities of pensioners from the balance sheets of Faisalabad, Gujranwala and Islamabad power distribution companies. As of June 2025, the total liabilities of the retired employees of just three companies were equal to Rs312 billion, which may further jump due to the splitting of balance sheets based on March 2026 results.

In June last year, the total assets of these companies were Rs1.2 trillion compared to liabilities of Rs1.05 trillion, showing a total net positive equity of Rs145 billion. However, the Gujranwala Electric Power Company (Gepco) had a negative equity of Rs14.4 billion as of June 2025 but the provisional figure for March 2026 was unknown, which is the month being used as a base for splitting the balance sheets. The assets and liabilities are planned to be parked in a Special Purpose Vehicle (SPV).

The final number would vary as the board approved the splitting of balance sheets based on audited results for March 2026. The PC board recommended that the Cabinet Committee on Privatisation (CCoP) approve the restructuring plans and schemes of arrangement for the privatisation of the first batch of DISCOs, namely Faisalabad Electric Supply Company (Fesco), Gepco and Islamabad Electric Supply Company (Iesco), according to an official announcement. It added that the restructuring plans and schemes of arrangement had been prepared on the basis of audited financial statements of the three DISCOs for the period ended March 31, 2026.

The proposed framework is designed to maximise value for the government of Pakistan while ensuring that the transactions remain commercially viable and attractive to the prospective private-sector investors. The Privatisation Commission said that under the proposed structure, a government-owned SPV would be established to carve out selected assets and liabilities of the three DISCOs, facilitating an efficient and commercially viable transaction. The government had also divided the balance sheet of PIA, pi…