THIS is apropos the report regarding the meeting between Nepra and the managements of Abraaj Group-led K-Electric and Shanghai Electric Power (SEP) delegation for conclusion of regulatory approvals leading to transfer of the Karachi-based integrated power utility (Feb 15).

I was shocked to read the submissive attitude of the regulator when it requested the delegation to share the transfer agreement, saying: “The regulator assured the delegation that it would ensure ‘complete secrecy’ and would guarantee it remained a secret for all times.”

This is totally unacceptable to me as a Karachiite. How can the management of a public utility be allowed to change hands, in darkness, when it will be responsible to provide affordable and efficient service to the 22 million people of Karachi and beyond to Lasbela?

As a substantial minority shareholder through the government, which owns approximately 25pc KE shares, I would like to exercise my right under the Freedom of Information Act, to request the ministry of water and power and/or the Cabinet Division, to provide me a copy of the transfer agreement between the Abraaj Group and SEP.

I was shocked to note that the Competition Commission of Pakistan (CCP) had cleared SEP to take over a major stake in KE on the basis of ‘its competition assessment’ and that ‘the transaction did not have potential to create monopoly to the consumer’s disadvantage’.

I ask the CCP Chairman to share his definition of a ‘monopoly’ in the context of KE’s exclusive privilege of a vertically integrated power utility controlling generation (barring a couple of IPPs), transmission and distribution. If this is not a monopoly, what is?

Furthermore, the CCP should make public its ‘competition assessment’ report. Of course, the question would arise, how was a monopolistic power utility privatised in the first place? My response is: let us learn from our past mistakes.

The huge outstandings of SSGC (Rs52 bn), 650mw power supply (Rs168 bn), Rs62 bn pointed out recently by the federal secretary, ministry of water and power on account of multi-year tariff/claw back and billions of rupees owed to Karachiites by not providing the time of use (ToU) metering/billing facility under current S.R.O. 571(I)/2016 dated June 24, 2016, and applicable since 2009 for residential and 2006 for industrial customers. My estimate based on 25 million residential customers plus industrial customers would be well over Rs200 bn.

Therefore, the total outstanding liabilities of Abraaj must be deducted from the transaction amount of $1.7 bn, until SEP pays upfront as a security through the government to the various liability accounts.

Nazim F. Haji

Karachi

Published in Dawn, February 21st, 2017