KARACHI, April 21: The Water and Power Development Authority has refused to guarantee supply of electricity to the Karachi Electric Supply Corporation after its privatization.

At present, Wapda supplies at least 250 megawatts to the KESC to enable it to meet the peak power demand which rises to over 1,700 megawatts in summers.

KESC officials fear that the stopping of electricity by Wapda may delay the privatization of the power utility.

They say that previously it was being thought that Wapda would stand by the new buyer of the KESC for at least one year. “A lot of things will not change during the first year after the KESC’s sell-off. For instance, the buyer will not dismiss any KESC worker as part of downsizing. The army will stay on in the KESC for at least one year to help the buyer recover dues and arrears.”

Meanwhile, a leading electricity producer, Allied Energy System, expresses a desire to buy the state-owned power utility.

The Allied Energy System has submitted a letter of expression to the Privatization Commission.

The government wants to sell 74 per cent stake in the KESC. Under the recommendations of PriceWaterhouseCoopers, financial adviser engaged jointly by the Asian Development Bank and the Privatization Commission, the government wants the KESC buyer to pump in at least $500 million for the much-needed restructuring of the power utility.

Sources say the Allied Energy System is already involved in the production of electricity in Pakistan.

It owns two independent power producers. The installed capacity of the AES Lalpir is 362 megawatts whereas its net capacity is 337 megawatts. The installed capacity of the AES Pak Gen is 365 megawatts and its net capacity is 337 megawatts.

They add that the federal government’s plan for the KESC’s restructuring, involving more than Rs111 billion, began with the decision of the economic coordination committee of the cabinet to issue Rs30 billion bonds on behalf of the power utility and take over its Rs81 billion losses and as loans as government equity. In this way, the government shareholding in the KESC would increase to around 99 per cent.

According to KESC officials, the Allied Energy System generates and supplies electricity in 31 countries the world over. It produces 63,000 megawatts of electricity while the total power demand of Pakistan is 17,000 megawatts or thereabouts.

The Allied Energy System produces 43 per cent electricity from coal-fired plants, 28 per cent from gas-fired plants, 26 per cent from hydel power plants and three per cent from oil-fired plants.