KARACHI, Sept 28: Amid reports that the Karachi Electric Supply Corporation is contemplating terminating its operations and management (O&M) agreement with Siemens, the Germany-based consultant on Friday rubbished allegations by the power utility’s new owners that it caused any financial losses.

Power breakdowns continued unabated in the city while the KESC and the consultant crossed swords with each other.In a statement, Siemens Pakistan’s Divisional Director, Corporate Communications, Ziaul Islam Zuberi, accused the new owners of the utility of completely failing to make the requisite investment in the KESC and honouring their obligations in relation to the privatization of the utility.

The statement said that Siemens Pakistan was neither an investor, nor owner nor partner in the KESC. “In the O&M agreement it is a predominantly technical contractor assigned to provide a roadmap for the improvement of the utility,” it added.

Siemens Pakistan claimed that it did this for all facets of the KESC’s operations assigned to it, but it was up to the owners to implement the roadmap by providing human resources and substantial investment into the KESC’s infrastructure.

According to Mr Zuberi, Siemens provided services “in the national interest and in the interest of the citizens of Karachi,” who deserved a first rate utility.

But what Mr Zuberi did not say was that when, as O&M contractors, all key management posts were controlled by Siemens, why did it continue for so long when the owners were not following its roadmap? He also did not touch upon the rapid deterioration in generation and massive breakdowns under Siemens’ control.

He also made no mention of why the new power generation plant was not installed, as promised.

On the contrary, Siemens accused the KESC of failing to live up to its financial obligations under different contracts and claimed it owed Siemens billions of rupees.

The statement said that the money owed is not only for payment of fees for the O&M agreement for the last two years, but for equipment supplied and services rendered under other contracts during this period which, according to Siemens, the KESC has not been able to settle despite repeated promises.

Under the O&M agreement, according to Siemens, it should develop and supervise the installation of a computerized financial and accounting system and arrange for training of KESC employees at the cost of the utility.

Siemens claimed there was no malfunctioning in the SAP programme, which it said was working perfectly. It claimed that the firm had no contractual obligation to operate SAP for the KESC, adding that the utility does not own the SAP system which it is operating.

Siemens has also sent another notice to the KESC in which it has pointed out that according to the O&M agreement, the KESC was not to hire Siemens Pakistan employees on deputation in the utility, which it blatantly violated by hiring a Siemens IT expert so that it could “take over SAP without Siemens’ authorization.”