The federal government has formed a technical committee to examine whether Lahore Electric Supply Company (LESCO) and Multan Electric Power Company (MEPCO) should be divided into smaller distribution companies before privatization.
The review could reshape Pakistan’s power sector by making the two state-owned utilities more attractive to investors while addressing long-standing operational inefficiencies.
The move is significant because LESCO and MEPCO collectively supply electricity to nearly 16 million consumers across Punjab. Any restructuring could influence future electricity distribution, investment, and service quality for millions of households and businesses.
Key Details
The Privatization Commission has constituted a technical committee comprising representatives from:
- The Privatization Commission
- The Power Division
- The National Electric Power Regulatory Authority
- The Power Planning & Monitoring Company
Officials said the committee will assess whether each utility should be split into two or three smaller electricity distribution companies before the privatization process moves ahead.
Key Facts
- The committee will study whether dividing LESCO and MEPCO is operationally and financially feasible.
- It will assess compatibility with Pakistan’s National Electricity Plan, Power Policy, and privatization strategy.
- Previous studies on restructuring the distribution companies will also be reviewed.
- The review comes before the next phase of the government’s privatization programme.
An official involved in the process said the committee will evaluate whether restructuring could improve operational efficiency and increase investor interest before any final decision is made.
Why the Government Is Considering the Move
The review follows concerns over the operational performance of both electricity distribution companies.
According to official audits for FY2024-25, LESCO and MEPCO continued to struggle with:
- High electricity theft
- Transmission and distribution (T&D) losses
- Weak bill recovery performance
Officials believe restructuring the utilities into smaller entities could improve management oversight, operational accountability, and privatization prospects.
Background
MEPCO is Pakistan’s largest electricity distribution company by consumer base, serving approximately 8.76 million customers across 13 districts in southern Punjab. Its network spans more than 82,000 kilometers of distribution lines and over 780 grid stations.
The company has recently expanded digital billing systems and advanced metering infrastructure to improve efficiency.
LESCO supplies electricity to nearly 7.05 million consumers across Lahore, Kasur, Sheikhupura, Nankana Sahib, and Okara. While the utility has accelerated smart meter deployment and digitalization efforts, shortages of transformers and electricity meters have delayed new connections and drawn regulatory attention.
The government’s privatization agenda has gained momentum in recent years as Islamabad seeks to reduce financial losses from state-owned enterprises.
Similar restructuring proposals have previously been discussed for parts of Pakistan’s power distribution sector, although large-scale implementation has remained limited.
What This Means
If the committee recommends dividing LESCO and MEPCO, the restructuring could make the utilities more manageable and potentially more appealing to private investors.
Supporters argue that smaller distribution companies may improve operational performance and accountability. However, energy experts note that privatization alone may not solve structural issues such as electricity theft, weak governance, and outdated infrastructure unless accompanied by broader sector reforms.
What’s Next
The technical committee is expected to submit its recommendations after reviewing operational, legal, and financial aspects of the proposal.
The federal government will then decide whether to proceed with restructuring before launching the privatization process for LESCO and MEPCO.
FAQs
Why does the government want to split LESCO and MEPCO?
The government is assessing whether smaller distribution companies would improve operational efficiency and attract greater investor interest during privatization.
Will electricity consumers be affected immediately?
No. The committee is currently conducting a feasibility review. No operational changes have been announced.
How many consumers do LESCO and MEPCO serve?
Together, the two utilities provide electricity to nearly 16 million consumers across Punjab.
