• Committee members also displeased over absence of power minister
• Vow to hold company’s management answerable to people

ISLAMABAD: Displeased at the continued absence of the power minister and K-Electric’s chief executive from its meetings, a Senate panel on Tuesday sought a complete record of the original privatisation and subsequent changes to the shareholding structure of Karachi’s power utility and vowed to hold its management answerable to the city’s people.

The committee, led by Senator Saifullah Abro, also unanimously decided to take up with the Senate chairman the continuous absence of Power Minister Khurram Dastgir Khan and KE Chief Executive Officer Moonis Alvi from the committee’s meetings.

The members, particularly Mr Abro, argued that since the government had a 24.36pc shareholding in KE, its management was answerable to the parliament and the people of Pakistan, and the committee would make sure Mr Alvi was held accountable.

“He is so powerful that he says he is not accountable to the parliament. We are trying to make him accountable to the people,” Mr Abro said, adding that KE might be independent to the extent of its private shareholding, but it was answerable for the government stake.

KE’s chief regulatory affairs, Imran Qureshi, told the committee that the company’s CEO had not turned up because of medical reasons, but many members said it was a constant excuse to avoid the panel’s meetings, as the KE’s CEO had been engaged in other activities.

After Mr Qureshi struggled to respond to various questions on his presentation and repeatedly requested to get back with such information after consulting the head office, the committee directed Mr Qureshi and the power division’s additional secretary to ensure that the KE chief should answer all questions raised in the next meeting on Monday.

The committee members showed displeasure that an executive among the top eight in the company and appearing on behalf of the CEO was unprepared for a single-point agenda because many issues were beyond his jurisdiction, unlike the CEO, who must be well-versed in all affairs.

Mr Qureshi told the committee that since its privatisation in 2005, the company earned its first profit in 2012 and had made a foreign direct investment of $700 million. The company, he said, had made a total investment of Rs474bn in the power infrastructure as of the 2021-22 fiscal year. He, however, couldn’t give an annual breakdown of investments.

He also could not provide investment details of six projects he reported to have been established after the privatisation — including Korangi Combined Cycle, Korangi Gas Turbine, SITE Gas Turbine, Bin Qasim Power Station (BQPS) II, BQPS III, and Port Qasim — with a total capacity of around 1,870 megawatts.

Senator Saifullah Abro questioned why K-Electric was still unable to meet Karachi’s energy requirement despite producing 1,870MW with an additional 1,100MW supply from the government.

He inquired the KE officials about the cost incurred on these power projects and details relating to the power purchase agreement (PPA) of K-Electric with the government.

Representatives of the power division also told the committee that the power supply to KE from the national grid had been increased from the original 650MW to 1,100MW through a revised agreement, but they failed to satisfy when and who signed the revised PPA.

A backbencher quipped that there was no PPA between KE and the federal government on 1,100MW and even the original 650MW agreement had expired many years ago.

Mr Abro expressed dissatisfaction over the briefing and directed the power division officials to provide a comprehensive briefing in the next meeting and come up with responses and documentation about the PPAs in the next meeting.

Senior officials of the Priva­tisation Commission told the committee that the government decided in 1992 with a strategic plan for the commercialisation and privatisation of the power sector. K-Electric was facing losses for the last 13 years, including Rs16.4bn in 2001, Rs17.7bn in 2002, and Rs14.4bn in 2003.

The company’s privatisation started in 2001 but could not be completed as a suitable buyer was unavailable.

The process was again initiated in 2003 and the contract was awarded to a consortium led by private equity firm Hasan Associates with a bid of Rs15.86bn — at Rs1.65 apiece for the 9.6 million shares — after the successful bidder of Saudi Arabia’s Kanooz Al-Watan declined to pay the bid money and take over the company.

Hasan Associates agreed to match the highest bid, although it had originally offered Rs1.1 per share (or Rs10.5bn).

Moreover, the matter relating to electricity provided to Balochistan’s agricultural sector for tube wells was also taken up amid complaints that KE and the Quetta Electric Supply Company (Qesco) were charging electricity bills for tube wells that were not even functional.

Published in Dawn, December 21st, 2022