Nepra hearing sees chaos as end sought to KE exclusivity

Updated 22 Sep 2020

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KARACHI: People trying to convince officials to continue proceedings during the suspension of the Nepra hearing about K-Electric affairs on Monday. — Fahim Siddiqi / White Star
KARACHI: People trying to convince officials to continue proceedings during the suspension of the Nepra hearing about K-Electric affairs on Monday. — Fahim Siddiqi / White Star

KARACHI: A public hea­ring of the National Electric and Power Regulatory Auth­o­rity (Nepra) seeking amendment to K-Electric’s licence was marred on Monday as public representatives and political leaders demanded that the federal government allow more power supply companies to operate in Karachi, while the city’s lone power utility termed the move to end its exclusivity “violation” of the agreement.

Participants, who apparently also included a sizeable number of power utility supporters, kept on chanting slogans intermittently, with Nepra chairman Tau­seef Farooqui asking them to show some restraint and not to disturb the proceedings.

However, the Nepra chairman had to suspend the proceedings after trying hard to control the situation that turned ugly after the remarks of former Sindh Governor Kamal Azfar that the Muttahida Qaumi Move­ment ‘earned huge amount’ from privatisation of then Karachi Electric Supply Corporation in 2005. “Why did they remain silent spectator when it was being privatised?” he asked, alleging that the MQM had acted as a facilitator at that time.

MQM-Pakistan’s Kha­waja Izharul Hassan, Javed Hanif and Hafiz Osama Qadri reacted severely to the allegations and started shouting. Despite the Nepra chairman’s efforts to ease the situation, the two sides kept on hurling remarks against each other leading to adjournment of the hearing.

Earlier, too, the chairman had to put off the hearing for 30 minutes as representatives of the public, traders, and industrialists and consumers kept chanting slogans against the power utility hardly half an hour of the proceedings.

The MQM-P member of the Sindh Assembly Khawaja Izharul Hassan said the provincial assembly had passed a resolution demanding more power utility companies in Karachi, but the same was not being implemented. The KE violated rights of consumers but there were no consumer courts functioning in the city, he said.

“The power utility kept on carrying out loadshedding even during the lockdown when the working hours for the business activities were remarkable reduced,” he said, adding that the power utility did not have infrastructure to detect faults and its staffers took several hours to rectify a common fault.

Taking a jibe on KE, the MQM-P legislator said the power utility did not have fuel in summers and gas pressure in winters.

Jamaat-i-Islami Karachi Ameer Hafiz Naeemur Rehman also came down heavily on the KE, complaining that the power utility had made lives of Karachiites miserable. He said that even areas exempted from loadshedding witnessed prolonged power disruption whenever the mercury touched 35 degrees Celsius. “The city faces power suspension soon after the first drop of rain, while maintenance shutdowns continue throughout the year,” he added.

He demanded that the federal government revoke the KE’s licence and order forensic audit and accountability of the power utility as well as the political parties that supported its privatisation.

Industrialist and representative of Site Association Abdus Sattar Jamani said there should be separate power generating and distributing companies. He demanded that the representative of Site Association demanded that they should be provided electricity directly from grid station, as they were ready to distribute the power themselves.

Habib Hassan, a former union council chairman of Pakistan Peoples Party from Lyari, also spoke on the occasion.

The Nepra chairman told the participants that he was conducting hearing on directives of the Supreme Court and assured all participants that justice would be done.

He asked the KE representative as to why the power utility had failed to take the much-needed action during the past 15 years. If that had happened, the situation might have been different, he said. “What you could not do in 15 years, how can you do it in the next three year? Do you have a magic wand?” he asked.

KE Chief Finance Officer Amir Ghaziani, however, opposed the amendment to its licence, saying that it had generation and distribution powers till July 2023. The KE’s CFO then assured the stakeholders that all areas would be exempted from loadshedding by 2023.

Mr Ghaziani explained that over Rs335 billion had been invested in Karachi’s power infrastructure since its privatisation in 2005.

He said the investments resulted in increasing KE’s generation capacity by 1,057 megawatts, almost doubling transmission and distribution capacity and exempting over 75 per cent of the city from scheduled loadshedding, which had been only 6.5pc in 2005. He added the KE was in the process of converting its pole-mounted transformers (PMTs) to aerial-bundled cabling, with over 9,000 PMTs converted to date, a process which would further improve the city’s power situation by reducing the risk of power theft. At the hearing, various stakeholders acknowledged that Karachi’s power situation had improved considerably since the power utility’s privatisation.

The CFO also mentioned KE’s future investments which would be affected due to a changed distribution regime. These investments include, but are not limited to, the power utility’s US$650 billion RLNG-fired power plant, BQPS-III. All these investments would make 93pc of Karachi areas free from loadshedding by 2023, he claimed.

‘KE not against competition’

He said the hearing was in public interest, which was also very important to K-Electric, citing examples of communities like Ghazdarabad and Altaf Town that had been uplifted through sustained investments and social engagements. The existing model of regulation enabled these investments through a cross-subsidy. “KE is not against competition but urges that a proper framework and implementation roadmap be shared, which ensures that public interest is prioritised and a level-playing field which balances both rights and obligations is provided for all players.”

The power utility official also highlighted that under Section 14A of the Nepra Act, any developments in the power markets should be prescribed under a national policy rather than for individual utilities and would be moved by the federal government with the approval of the Council of Common Interest (CCI).

Nepra will hold the next public hearing in Islamabad.

Published in Dawn, September 22nd, 2020