KARACHI, April 29: With power outages in the city persisting despite an enhanced supply from Wapda, the failure of the military-led management of the Karachi Electric Supply Corporation to improve the utility’s distribution system before its privatisation remains a major cause of the prevailing crisis, according to insiders.
The power crisis aggravated because the utility never considered measures to cope with the additional load of uninterrupted power supplies, which consume a considerable amount of power for charging the attached batteries. The widespread use of UPS is in addition to the proliferation of other electrical appliances as society undergoes a technology-based transformation.
Another reason behind this crisis is that while the load has constantly been increasing, no upgrading of the distribution and transmission network has been undertaken over a decade and the system has now started falling apart.
There has always been an urgent need for new generation plants, especially in the public sector, to meet the future demand in Karachi as the existing transmission lines, grid stations and distribution network have been carrying much more load than their capacity, and they simply could not carry more.
Surprisingly, the privatisation agreement with the new KESC owners does not bind them to make any investments in the transmission and distribution network over a specified period. No investment has been made in the system since privatization, probably because of this exemption. This makes it quite clear that the crisis will continue to deepen if the upgrading of the network is not undertaken on a war-footing.
Almost half of the available electricity being lost in transmission and distribution could be saved and tariffs could be brought down significantly by strengthening the system. Sources say that the crisis is not one of shortage of electricity; rather it is one of poor management over a very long period of time.
The proposal to set up power plants on a public-private partnership basis for industries is also being discussed while experts have advised the government to speed up work on a coal-based power project to meet the shortfall.
It may be pointed out that the government had doled out Rs12 billion to the utility under the financial improvement plan in 2004 to bail out the KESC management and help it overcome the crisis.
According to sources, the previous KESC management had spent about Rs3 billion over a period of two years prior to the utility’s privatisation but no tangible development work was seen on the ground and the crisis persisted. Had the money invested by the government been spent on grid stations and other projects on a war-footing, the crisis would not have become so intense.
The new private management is now utilising the leftover amount of the government funding in the setting up of several new grid stations to address the load distribution and management system across the city. M/s Siemens and M/s ABB would be involved in the process, sources said.
At the initial stage, many new grid stations have been planned to be set up – two in Korangi and one each in Malir, Gulshan-i-Maymar, Nishtar Road, Azizabad, SMCH and Tipu Sultan Road area.
The main problem in implementing these projects is the cost of land which has swelled many times over the last couple of years. The KESC has encountered difficulties in acquiring land in Memon Goth where the revenue department has failed to provide the alternative land against the four-acre plot it had earlier allocated to the utility. The money is with the department but the land is not available. The cost of land may delay most of these projects.
Thrice a day load-shedding of about 90 minutes in each cycle has enraged people and many of them, especially the shopkeepers, have been taking to the streets.
Stakeholders and other people also see ‘foul play’ in the process of KESC privatisation arguing that it was given away for Rs22 billion against the estimated value of its assets and receivables of around Rs200 billion.
As complaints against the new management are on the increase, some government circles are expressing concern and giving credence to thoughts about reversing the utility’s privatisation as soon as possible.
Meanwhile, the proposal to set up two more power plants having a capacity of 300 megawatts each is being given consideration by the quarters concerned and reports of inducting the former KESC chief as technical adviser may speed up things in this regard. Such projects would cut KESC’s cost as the KESC-produced electricity would be cheaper than that of IPPs.
It appears that the management is under pressure to launch yet another ‘fire-fighting’ operation. Experts maintained that the KESC did not require foreign or federal government funding because, according to them, even by a most conservative estimate, the KESC assets are valued at no less than Rs150 billion. There are further receivable of over Rs40 billion. Moreover, the KESC possessed 185 plots at prime locations in Karachi which are worth more than Rs22 billion. Bin Qasim power plant is also valued at Rs26 billion.
