Privatising Discos won’t be enough

YEARS before I joined K-Electric, I led a large industrial company facing a choice many Pakistani manufacturers know well: keep relying on grid electricity or invest in captive generation. We chose captive power because it made better commercial sense than buying from the grid at prevailing tariffs and operating conditions. Years later, as COO Distribution at K-Electric, I saw the same issue from the other side. That experience taught me a critical lesson: Pakistan’s power sector is not only challenged by consumers it cannot collect from, but increasingly by the consumers who can pay. As the government moves to privatise electricity distribution companies (Discos), the debate has focused on losses. Can private owners improve collections, reduce theft, and run utilities more efficiently? Those are important questions, but they risk obscuring a deeper one. What happens when a utility steadily loses the customers that make it financially viable? Most reform discussions focus on bad load, electricity that is stolen, unpaid for, or hard to recover. Yet the sector may be overlooking an equally important problem — the gradual loss of good load. That distinction matters because it changes how we think about reform. Pakistan’s power sector does not simply have an inefficiency or a theft problem. Increasingly, it has a customer problem. Not all losses are created equal: Pakistan often treats distribution losses as a single problem, but they fall into two categories. First are technical losses, caused by ageing infrastructure, overloaded transformers, inefficient conductors, poor network design and outdated equipment. Every electricity system experiences them and understands the remedies: modernise networks, upgrade equipment, enforce standards and plan investments carefully. Second are commercial losses, including theft, illegal connections, meter tampering, billing inefficiencies and poor recovery of dues. These are governance failures shaped by weak accountability, poor enf