November 15, 2008	Saturday	Ziqa'ad 16, 1429

KARACHI, Nov 14: Following the government’s announcement about a downward revision of the power tariff amid mounting public criticism of a recent hike , the Karachi Electric Supply Company (KESC) has decided that gradual adjustments, in accordance with the new tariff structure, will be made in the subsequent bills to be received by its consumers.

Through a press release issued on Friday, KESC spokesperson Ayesha Eirabie said if any adjustment was required to be made in the already issued bills, it would be done and accordingly it would appear in the next month’s bills.

She said that all domestic and commercial power consumers who had availed the facility of 60 per cent payment of their bills for the months of October and November would now be given the facility of payment of the remaining amount of their past bills as per the new tariff structure in two equal monthly instalments.

On Thursday, the government revised the previously announced increase of up to 31 per cent in power tariff down to 13 per cent on the recommendations of a special committee constituted by the government. Although the average increase claimed by the KESC was 31 per cent, it appeared to be 70 per cent for consumers placed in higher slabs.

The relief package announced by the government last month had resulted in a Rs40 billion reduction in revenues from the power consumers through the September bills (October in case of KESC). Out of this amount, Rs9 billion was for the KESC.

In addition, the utility is supposed to receive Rs12 billion from a subsidy of Rs77 billion during the current financial year, bringing the total bailout for the KESC in the revised package to Rs21 billion.

Meanwhile, stakeholders have slammed the decision to bail out a company that has continuously been failing to contain its transmission and distribution (T&D) losses.

They maintained that had the KESC worked on it soon after its privatisation, it would not have needed bailout packages, nor would it have under any economic pressure to seek an increase in power tariff.

It has been estimated that the KESC was losing about Rs40 billion annually to the T&D losses.

Revised tariff structure

The ministry of water and power has issued the revised tariff structure in pursuance of sub-section (4) of section 31 of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (XL of 1997). In a notification dated Nov 12, 2008, the ministry stated: “The federal government is pleased to direct that the following amendment shall be made, and shall be deemed to have been so made on Oct 4, 2008, in its notification No. SRO-1043(1)/2008, dated Oct 4, 2008. In the aforesaid notification for Schedule-III, the following shall be substituted: