KARACHI: KESC told to shape up as power crisis worsens
By Shamim-ur-Rahman
KARACHI, July 10: As the mercury hit 34.8 degrees Celsius with 67 per cent humidity on Tuesday, Unit No Four of the KESC’s Bin Qasim power plant came back on-line after 24 hours. But the utility resorted to more than one-and-a-half hour’s load-shedding thrice a day as it faced a shortfall of about 150 megawatts.
Complaints of low voltage and power outages persisted as the quarters concerned were examining various facts to fix responsibility for the power crisis amid indications that the provincial government was asking the utility to “reform” its operations and maintenance (O&M) cadre and make it more responsive to the needs of the general public.
According to sources, there was a feeling in government circles that the electricity problem in Karachi had amplified not only due to the “incompetence” of the new O&M set-up of the KESC but also due to strong resentment from the utility’s old guard and the deprived and neglected workforce.
Conflict of interest
Government sources said that a “conflict of interest” was evident from the complaints against the O&M contractors that the KESC’s complaint centres were generally not responsive to the public’s grievances and that there was a considerable delay in attending to the faults and repairs of the generation units.
According to the sources, the O&M contractors of the KESC, who were inducted on hefty monthly payments and perks, were more interested in protecting Siemens’ interests rather than those of the utility.
The conflict of interest started right after the privatisation as a few so-called “experts” with no knowledge of running an electricity company were imposed on low-paid but more experienced engineers and the managerial cadre, which had kept the company going, though it failed to reduce line losses and generation shortfall. Other vested interests benefited from the situation, to the detriment of the general public.
According to the sources, a committee was examining the reasons behind the power crisis amid rising load and depleting generation capacity of the KESC and the failure of the O&M contractors to upgrade the distribution and transmission network, which has started falling apart.
The quarters concerned were especially focusing on recurring faults in the various units of Bin Qasim power plant, despite huge expenditure on their revamping and repairs.
As concerns have been expressed over the long-term development plans of the privatised management, the official quarters were pushing the utility to arrange barge-mounted plants for meeting the immediate needs of the city, while long-term projects were taken in hand, said the sources.
Besides encouraging new IPPs to set up KESC dedicated power plants, the government was also pushing the new management to urgently invest in setting up the utility’s own generation plants in Karachi to meet the future demand. Similar solutions were required to improve transmission lines, grid stations and distribution lines.
‘Bad management’ to blame
The government was finding it difficult to fix responsibility on the O&M contractors because the sale agreement with the new KESC owners did not bind them to make any investments in the transmission and distribution network over a fixed period. No investment has been made in the system since the privatisation.
As such almost half of the electricity was being lost in transmission and distribution. The government circles have been briefed that there was no crisis of shortage of electricity; rather it was one of continuous bad management over a very long period of time, the sources said.
The proposal for industries to set up their own power plants on a public-private partnership basis is also being discussed. Experts have also advised the government to speed up work on a coal-based power project to meet the shortfall.
Rs12bn: Where did it go?
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 power crisis.
According to the sources, the previous management had spent about Rs3bn over the next two years prior to privatisation, but no tangible development work was seen on the ground. Had the money given by the government been spent on grid stations and other projects, the power crisis would not have been so intense.
The new private management was now using the leftover amount to set up several new grid stations for addressing the load distribution and management system across the city. Siemens and ABB would be involved in the construction of these grid stations, sources said.
Government circles were also examining the KESC management’s bank borrowing policies because they believed that the utility did not require foreign or federal government funding because, according to them, even by the most conservative estimate, the assets of the KESC were valued at no less than Rs150bn. The utility was further receivable of over Rs40bn. Moreover, the KESC possessed 185 plots at prime locations in Karachi, which were worth more than Rs22bn. Bin Qasim power plant alone was valued at Rs26bn.
