By Staff Reporter
ISLAMABAD: A Senate panel said the planned sale of state-run power distribution companies requires fresh approval from the Council of Common Interests, rejecting the government’s position that a 2011 decision already covers it.
The disagreement, aired Wednesday at a subcommittee of the Senate Functional Committee on Devolution, adds a constitutional hurdle to a privatisation program Prime Minister Shehbaz Sharif’s government is trying to complete this fiscal year. Muhammad Ali, the prime minister’s adviser on privatisation, told the panel no new approval is needed.
Ali said the companies, known as Discos, have lost more than $30 billion over the past 15 years. He cited electricity theft and operational inefficiencies, and said privatisation is necessary to improve performance and reduce the burden on the national exchequer.
The CCI approved the privatisation of three power generation companies and nine distribution companies in 2011, Ali said. It also approved the National Electricity Policy on June 21, 2021, which recommended that the government explore privatisation options to improve the efficiency of state-owned entities. Both decisions remain valid, he said. The policy was drawn up after recommendations from the provinces, and further work on the privatisation program followed in 2023-24.
The law division reconfirmed that position in a Sept. 25, 2026 letter, which said the 2011 decision means fresh approval isn’t required. On that basis, the privatisation division concluded that no new CCI sign-off is needed, Ali said. He told the subcommittee that legal and procedural requirements for the process have been met. Sending the matter back to the CCI now would risk significant delays, hurt investor confidence and weaken the finances of the distribution companies, he argued.
Senator Zamir Hussain Ghumro, who convened the subcommittee, said the CCI’s constitutional role can’t be overlooked. He questioned whether the sale is consistent with the division of powers under Article 157 of the Constitution, saying electricity distribution involves provincial interests. Citing earlier court rulings and privatisation efforts, he stressed transparency and the protection of provincial interests, and asked the authorities to hand over the relevant decisions and supporting documents. Because the provinces sit on the CCI, he said, they should get the chance to weigh in on matters within their domain.
Officials told the committee the CCI has taken 11 relevant decisions and that, on the available record, no province has formally registered reservations. They said documents and details of consultations with the provinces would be shared. Ghumro said the matter is constitutionally one for the CCI and that the paperwork must be submitted so the process can be examined from every angle. The committee said its aim is to ensure constitutional compliance, transparency and parliamentary oversight.
The panel has taken this line before. In August, the same subcommittee directed that the Disco sale be referred to the CCI, ruling that selling Discos without the council’s consent would violate Articles 154 and 157 of the Constitution. In late September, Ghumro warned that ignoring the committee’s directions could bring parliamentary action, including a privilege motion.
The dispute reaches the first batch of sales. The Privatisation Commission has put up Faisalabad Electric Supply Co., Gujranwala Electric Power Co. and Islamabad Electric Supply Co., which together serve more than 14 million consumers across Punjab, the Islamabad region and parts of Azad Jammu and Kashmir. In June, Ali said the government planned to run the three transactions in parallel, with bidding held one after another in October, November and December. Local media reported that the sales are tied to targets agreed under Pakistan’s International Monetary Fund loan program. Prime Minister Sharif ordered an aggressive push in August to attract leading international investors. It isn’t clear how the Senate panel’s objections will affect that timetable.
The subcommittee met to review federal spending on ministries, institutions and bodies the federal government has kept despite the transfer of provincial subjects under the 18th Constitutional Amendment. It also reviewed compliance reports and the status of CCI matters. Senators Jan Muhammad Buledi and Poonjo Bheel attended, along with the secretaries of the cabinet, the CCI and the Establishment Division, and other senior officials.
The panel began with a report from the Auditor General of Pakistan and the Accountant General on federal spending on ministries covering provincial subjects. Ghumro said concerns persist 16 years after the amendment, including over education and health, which the Implementation Commission notified as provincial matters. Citing Articles 168 and 169 of the Constitution and the legal framework for auditing public spending, he questioned the authorisation and constitutional basis for about Rs2.6 trillion spent on the health and education ministries over that period. He called the spending a misuse of taxpayers’ money and argued that the federal government may spend only on federal subjects. He said the total could climb to several trillion rupees once spending on other ministries created for provincial subjects is counted.
Ghumro expressed concern that the committee hadn’t received the details it sought within the stipulated time. He said parliament is the primary authority for authorising public spending and that money from the Federal Consolidated Fund can’t be used for devolved matters. Auditor General’s office officials said their audits follow budgets approved by the competent parliamentary forum, and they acknowledged limits in the coverage. The committee has identified 24 ministries and organisations it wants abolished and directed the auditors to provide audited spending details for the past 16 years.
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