Abstract
This report argues that deregulation must precede privatization in Pakistan's power sector to avoid replacing public monopolies with private ones, which would perpetuate inefficiencies and poor service outcomes. Pakistan's current single-buyer model restricts competition, driving up costs and operational challenges.
Drawing insights from global cases such as the successes of the UK and Chile and the failures of California and Mexico, as well as India's energy market transformation, the report illustrates that deregulation can drive market efficiency, reduce costs, and enhance service quality.
Pakistan's own experience in deregulating its telecommunications sector further highlights the value of a regulatory framework that supports competition and attracts investment. A phased roadmap is proposed for the privatization of Distribution Companies (DISCOs), recommending the creation of competitive wholesale and retail markets, tariff deregulation, and open access to transmission networks, with the National Electric Power Regulatory Authority (NEPRA) and other regulatory bodies playing key roles.
The report ultimately advocates a comprehensive deregulation strategy to ensure privatization delivers efficiency gains, cost reductions, and service improvements, aligning Pakistan's power sector reforms with global best practices.
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