What Private DISCO Operators Must Change Before Consumers Notice

Ownership reform will matter only if it produces measurable improvements in electricity reliability and service

Pakistan’s proposed privatisation of electricity distribution companies has moved from a broad policy discussion to a defined transaction process. On 17 September 2026, the National Assembly Standing Committee on Privatisation was told that the approved structure provides for the sale of 51 to 100 per cent of each selected DISCO’s shareholding together with management control. The first batch covers FESCO, GEPCO and IESCO, which collectively serve more than 14 million consumers. Due diligence has been completed and the restructuring plan and transaction structure have been approved.

Ten parties have been pre-qualified for FESCO, while 11 expressions of interest or statements of qualification were under evaluation for GEPCO at the time of the committee briefing. The IESCO expression-of-interest process subsequently moved forward, with the Privatisation Commission extending the submission deadline to 21 September.

The political case for or against privatisation will continue to be debated. For electricity consumers, however, the more useful question is practical: what would a new operator actually have to change for households and businesses to experience fewer outages and better service?

Ownership and reliability are not the same thing. A share transfer can take place on paper, but an electricity network improves only when its equipment, operating practices, data systems, investment decisions and regulatory incentives improve. Private management may create stronger commercial discipline, but it cannot make an overloaded transformer, ageing feeder or slow fault-response system disappear overnight.

Start with an honest baseline

A new operator should begin by establishing a credible, independently verified picture of present performance.

Pakistan’s regulator uses two established reliability measures. The System Average Interruption Frequency Index, or SAIFI, measures how often the average consumer loses supply. The System Average Interruption Duration Index, or SAIDI, measures the total duration of those interruptions.

NEPRA’s performance report for FY2024-25 shows the scale of the challenge. IESCO reported SAIFI of 15.39 interruptions and SAIDI of 834.22 minutes per consumer. FESCO reported 33.31 interruptions and 1,185.68 minutes, while GEPCO reported 49.49 interruptions and 3,833.19 minutes. The regulatory benchmarks are 13 interruptions and 14 minutes per consumer annually.

No distribution company met the SAIFI benchmark, and all failed the SAIDI benchmark. These figures should still be treated as reported data rather than a perfect record of consumer experience. NEPRA says most DISCOs lack automated systems capable of recording interruptions accurately, particularly on low-voltage networks.

The first visible reform should therefore be a modern outage-management system linked to control-room records, feeder sensors and advanced meters that can signal when supply disappears and returns. Consumers and regulators should receive monthly feeder-level data separating planned maintenance, load management, upstream supply shortages and local network faults.

Company-wide annual averages can conceal badly performing neighbourhoods and allow apparent progress without a corresponding improvement in lived experience.

Fix overloaded equipment before it fails

The second test is whether the operator removes the physical causes of repeated local failures.

Distribution transformers, cables and 11 kV feeders are often asked to carry loads close to or beyond safe limits. The result can be excessive heating, voltage drop, protection trips, shortened equipment life and recurring outages.

A serious operator would create a verified digital asset register, map the network through a geographic information system, monitor transformer and feeder loading, and rank investments according to failure risk and the number of consumers affected.

Engineering work should include augmenting overloaded transformers, splitting heavily loaded feeders, replacing undersized conductors, balancing loads across phases, improving protection coordination and keeping critical spares near high-risk areas.

Investment plans should identify each overloaded asset, the planned intervention, the completion date and the number of consumers whose risk will be reduced. Regulators should verify physical delivery rather than accepting expenditure claims alone.

Smart meters may expose theft and improve billing, but they cannot compensate for an overloaded transformer or a weak conductor. Reliability requires investment in the physical network as well as its digital layer.

Restore healthy sections faster

The third test is restoration speed.

Not every fault can be prevented, but the duration and area affected by a fault can be reduced substantially.

Supervisory control and data acquisition, distribution-management software, fault-passage indicators, remotely controlled switches, reclosers and sectionalising devices allow a control room to locate a fault, isolate the damaged section and restore unaffected consumers without waiting for a crew to patrol an entire feeder.

Mobile workforce systems should then direct field teams to the likely fault location, while standard switching procedures and properly stocked service centres reduce repair delays.

The consumer-facing measures should include median restoration time, the percentage of interrupted customers restored within defined time bands, repeat faults on the same feeder and transformer failures per thousand units in service.

A local fault should not keep every customer on a long feeder without electricity for hours.

Protect consumers from poor voltage

The fourth test is power quality.

Consumers suffer not only when electricity disappears but also when voltage remains low or fluctuates enough to damage motors, appliances and commercial equipment.

A private operator should be held to voltage-quality standards at the customer connection, supported by automated voltage regulation, reactive-power management, phase balancing and properly sized low-voltage feeders.

Low-voltage complaints should be mapped and treated as evidence of network weakness rather than isolated service tickets. The operator should publish voltage-compliance results by area and show how corrective investment has changed conditions at the customer connection.

Separate technical losses from theft

The fifth test is whether losses fall for technically credible reasons.

In FY2024-25, NEPRA recorded transmission and distribution losses of 8.61 per cent for IESCO against an allowed 7.31 per cent; 9.02 per cent for FESCO against 8.38 per cent; and 10.60 per cent for GEPCO against 8.90 per cent. The regulator estimated the financial impact of those gaps at Rs4.78 billion, Rs2.97 billion and Rs5.50 billion respectively.

But the headline loss figure combines two different problems.

Technical losses occur in conductors, transformers and other equipment. They can be reduced through better network design, suitable conductor sizes, transformer-load management, network reconfiguration, reactive-power control and maintenance.

Non-technical losses arise from theft, illegal connections, meter tampering and failures in billing or administration. A new operator should publish separate, independently checked plans for each.

Advanced metering and feeder-to-transformer energy accounting can identify suspicious consumption, meter bypass and energy imbalances, but genuine technical-loss reduction still requires physical work.

IESCO, FESCO and GEPCO each reported recovery above 100 per cent in FY2024-25, so their consumer-service challenge cannot be reduced to bill collection alone. Technology must also be paired with transparent procedures, data security and safeguards against erroneous billing.

Prepare the network for two-way electricity flows

The sixth test is readiness for a changing electricity system.

Rooftop solar, batteries, electric vehicles and two-way power flows are transforming distribution networks. A new operator cannot manage tomorrow’s grid using yesterday’s planning assumptions.

It will need accurate digital network models, hosting-capacity studies, modern protection settings and faster, transparent interconnection processes.

Without these capabilities, customers who invest in clean energy may face arbitrary restrictions while voltage and protection problems emerge on feeders designed for one-way flow.

Distribution planning must therefore account for both the electricity consumers draw from the grid and the power they increasingly inject into it.

Make the contract measurable

The seventh and decisive test is the transaction and regulatory framework.

A private DISCO would still operate a monopoly network; most consumers could not choose another set of poles, wires and transformers. Commercial returns and management incentives should therefore be linked to independently verified outcomes that consumers can observe.

The sale agreements, licences and multi-year tariff framework should establish verified baselines and annual trajectories for SAIFI, SAIDI, restoration time, transformer failures, voltage compliance, technical and non-technical losses, metering accuracy, complaint resolution, new connections, public safety and capital-project delivery.

Results should be published by feeder and consumer category, independently audited, and tied to meaningful rewards and penalties.

Baselines must be published before management transfer so later improvements cannot be claimed against a moving starting point.

NEPRA should retain strong powers to audit data, enforce minimum standards and protect consumers from paying for investment that was promised but not delivered.

The consumer scorecard

Consumer outcome	Public measure	What improvement does it mean?
Outage frequency	SAIFI by feeder and subdivision	Fewer interruptions per consumer
Outage duration	SAIDI and median restoration time	Shorter interruptions and faster repair
Asset health	Transformer failures and overloads	Fewer repeat breakdowns
Network efficiency	Technical and non-technical losses	Lower losses for verified reasons
Power quality	Voltage compliance at connections	Less damaging low or fluctuating voltage
Customer service	Connection and complaint-resolution time	Faster and traceable service
Investment delivery	Projects completed against commitments	Promised upgrades reach the network

Prevent easy gains that leave vulnerable consumers behind

Reform also requires safeguards against easy but misleading gains.

An operator could improve financial results by delaying maintenance, reducing field staff, disconnecting difficult consumers or concentrating investment in affluent and industrial areas.

Service obligations must cover rural and underserved feeders, connection times, complaint resolution, safety performance and affordability protections alongside collection and loss targets.

Reliability gains should be geographically visible rather than confined to selected corridors.

Consumers should be able to compare what was promised, what was spent and what changed on their feeder. Complaint records, outage data and investment completion should be open to independent scrutiny.

Changing ownership may create an opportunity for better management, technology and investment. It is not itself an engineering solution.

Consumers will know reform is working only when transformer failures become rarer, interruptions become shorter and less frequent, voltage remains within limits, faults are isolated and repaired faster, and complaint records match lived experience.

That is the real test of any DISCO reform: not who owns the company, but whether the grid itself performs better.

Dr Habib Ur Rahman Habib
UK-based Energy Innovation Scientist