Arrangements for the privatization of the state-owned power sector in Pakistan have been finalized, the government claims.

According to the plan, which has been unveiled by the Privatization Commission, the government intends to implement a gradual transition during which the vertically integrated state-owned utilities will be replaced by a decentralized system with separate power generation, transmission and distribution companies.

Substantial private sector investment and private sector management will eventually be introduced into these companies in order to encourage a competitive environment. Initially the privatization focus will be on the distribution operations of the Water and Power Development Authority (Wapda) and of the Karachi Electric Supply Corporation (KESC).

Wapda’s distribution operation involves eight area electricity boards serving 10 million consumers. KESC supplies power to 1.3 million consumers.

Efforts are already underway, with preparations for privatization of the Faisalabad Area Electricity Board and of KESC almost complete. Expressions of interest from commercial organizations are expected to be sought soon.

Privatization will take place through a competitive bidding process.

In addition, the Privatization Commission is planning to sell additional shares in the Kot Addu Power Co.