ISLAMABAD: The Competition Commission of Pakistan (CCP) has said that the state-owned enterprises (SOEs) extensive role in the transmission and distribution sectors, hinders power sector’s development.
A report on the state of competition in power sector, released by the CCP, points out strong presence of SOEs and the resulting impact on competition within the power sector.
The report recommends the government to open the power market and enforce the model of Competitive Trading Bilateral Contract Market (CTBCM).
The CCP report recommends direct agreements between the power producing and selling companies for purchase and transmission. The Competition Commission report also suggests the end of in-between role of the Central Power Purchasing Agency (CPPA).
The NEPRA had approved implementation of the CTBCM model in 2020.
The commission’s report also recommends separation of power production, transmission and distribution.
“There is need to upgrade the outdated power transmission system on emergency basis,” according to report.
“The state-owned distribution companies have been in nine to 35 percent line losses and the only solution of line losses has been privatization of the distribution companies,” report said. “More efficient distribution entities are bearing losses of the underperforming DISCOs,” according to CCP report.
The report suggests that the buyers should enter in direct purchase agreements with the power generation plants.
The CCP also recommend instant shutdown of outdated power plants to decrease the burden of capacity payment. It recommends implementation of the Transmission Line Policy 2015.
The competition commission also recommends inviting private sector to join the transmission infrastructure.
The CCP recommends privatization of the DISCOS to bring the line losses down.
At the report’s launch, CCP Chairman Dr Kabir Ahmed Sidhu emphasised the critical role of a competitive power sector in driving economic growth and providing affordable energy to consumers.
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