ISLAMABAD: The Supreme Court summoned on Thursday federal secretaries of finance and water and power along with Attorney General Salman Aslam Butt over a dispute on the payment of Rs28.7 billion dues to K-Electric by the Karachi Water and Sewerage Board (KWSB).

They are required to appear before the court on Feb 25 to shed light whether it is the responsibility of the federal government to clear the arrears of an institution which functions under the Sindh government.

K-Electric – formerly Karachi Electric Supply Company – is a privatised public utility principally engaged in the business of generation, transmission and distribution of electricity in Karachi and some adjoining areas of Sindh and Balochistan.

Know more: Minister rules out renewal of accord with K-Electric on previous terms

The company supplies electricity to 2.4 million domestic, commercial and industrial consumers spreading over approximately 6,500 square kilometres of service territory.

The KWSB supplies water and provides sewerage services to the people in Karachi.

The controversy arose when K-Electric filed in the Supreme Court an appeal against a Sindh High Court’s verdict of April 14, 2014, restraining the power utility from interrupting supply to the KWSB.

The appeal was taken up by a three-judge Supreme Court bench headed by Justice Saqib Nisar on Thursday. The court observed that the payment of dues for an electricity distribution company was like oxygen and if the K-Electric system broke the entire city would plunge into darkness.

The power utility through its counsel Abid S. Zuberi urged the bench to set aside the high court’s order and direct the federal government to pay the company KWSB’s outstanding dues of Rs28.7bn as of April 30, 2014, excluding mark-up.

The appeal claimed that the federal government also owed Rs36.24bn and the Sindh government about Rs9bn to the company on different heads. K-Electric also asked the court to order the KWSB and the federal government to pay the current monthly bill ranging between Rs600 million and Rs700m.

The power utility asked whether it was under any obligation to supply electricity to a defaulting strategic customer like the KWSB under the implementation agreement (IA) signed between them on Nov 14, 2005, despite the fact that the latter had failed to clear charges of Rs28.7bn and its consistent default on the current monthly bills which, after recent increases in tariff by Nepra, rose to Rs600m-700m.

According to the appeal, the high court cannot interpret the IA to provide the KWSB with blanket immunity from paying its electricity charges, especially when the K-Electric had consistently pursued the organisation for the payment.

Published in Dawn, February 20th, 2015

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