KARACHI, Aug 28: The KESC management has decided to further mortgage five distribution units to raise about Rs60 billion for its so-called development work, sources said here on Tuesday.

This would be a major exercise by the privatised utility since April when it had for the third time mortgaged its premier, but troubled, Bin Qasim thermal power plant for securing $125 million loan, apparently to enhance its generation capacity.

KESC sources say that despite borrowing Rs6 billion from the consortium of banks for running the utility, the management has so far failed to improve either its generation or the 11 kV distribution system.

They claim that $125 million loan secured by the utility, through the Habib Bank-led consortium of banks from the IFC and ADB, for improving power generation, will take at least two years to see additional power on the grid through the KESC’s own sources. But to get this loan the KESC has mortgaged its prime Bin Qasim generation plant, for a third time, and the Korangi Thermal power plant.

It was said by the government and the KESC management that once it was hooked to Hub Power directly, instead of getting its supplies from Wapda and that too at a higher cost, things would improve in Karachi. But despite the fact that Hub Power is operating at full capacity, the power situation has not improved. Rather it has worsened. It simply reflects the management’s failure to asses the situation, say KESC insiders.

Despite being stripped of the absolute power enjoyed by the management, there has been a growing demand from within the utility to penalize the foreign firm for what has been termed by insiders “illegal and conspiratorial action”. Concerns have also been expressed by the special committee on the utility’s depleting generation and crumbling and distribution network.

The KESC’s power generation over the last one and half years has saturated and its distribution system collapsed despite a Siemens action plan for cost-efficient generation of a maximised number of units and transmission system reliability.

Line losses have increased and complaints about the metering system have been on the rise. There has been no sign of a pragmatic action plan for enhancing the KESC’s generation capacity.