KARACHI: Army fails to slash KESC's transmission losses - Report
By Bahzad Alam Khan
KARACHI, Jan 3: The army has brought down the transmission and distribution losses of the Karachi Electric Supply Corporation only by less than one per cent in the past five years that it has been running the power utility.
According to the 92nd annual report of the KESC, the transmission and distribution losses of the power utility dropped to 37.8 per cent in 2003-2004. In May 1999, when the army took over the KESC management, the transmission and distribution losses had stood at 38.64 per cent.
The auditors' report contained in the annual report says: "...the financial statements disclosing the Transmission and Distribution losses which are approximately 37.8 per cent of the total electricity generated during the year.
One of the factors attributable to these losses is the alleged theft of electricity, which has directly affected the profitability of the corporation. These factors, if controlled effectively, may enable the corporation to minimize its overall losses. The amount of theft, however, remains indeterminate."
As noted earlier, the transmission and distribution losses stood at 38.6 per cent in 1998-1999. However, they rose to 40.23 per cent in 1999-2000 only to drop to 36.8 per cent in 2000-2001. In 2001-2002, they again rose to 41.1 per cent. However, they came down slightly to 40.7 per cent in 2002-2003.
According to the report, the number of units generated by the KESC in 2003-04 was 9,724,274 megawatts-hour. The total number of units available with the KESC for distribution was 12,726,769 megawatts-hour. However, the number of units billed by the KESC was 7,911,389 megawatts-hour.
In the report, the KESC administration makes no mention of the memorandum of understanding it had signed with the Asian Development Bank to reduce the transmission and distribution losses in three phases: during 2000-2001 by 6.6 per cent, during 2001-2002 by 7 per cent and during 2002-2003 by 6 per cent.
"Had the KESC stuck to the memorandum of understanding, the transmission and distribution losses would have been much less than 30 per cent," analysts point out. The audit report shows that loss before tax/subsidy stood at Rs8.3 billion in 2003-04.
It, however, offers no explanation why the remuneration of the managing director, who is on deputation from the armed forces, rose by Rs187,000, from Rs727,000 in 2003 to Rs914,000 in 2004.
