Pakistan has repeatedly considered the privatization of electricity distribution companies (DISCOs) as a strategy to reduce fiscal losses and improve sector performance. However, evidence from past reforms—including unbundling, IPP policies, and management contracting—shows mixed outcomes.
Question: Critically evaluate whether privatizing DISCOs is likely to address the core structural problems in Pakistan's power sector.
In your answer, address the following:
i) Assumptions underlying the case for privatization.
ii) Key risks and constraints specific to Pakistan's institutional context.
iii) Alternative or complementary reforms that could be implemented with or without privatization to ensure sustainable improvements in distribution performance.