METRO VOICE: Mismanagement within KESC portals

Riots, burning vehicles and damaged complaint centres confirm the worsening power situation in Karachi. While one day’s six-hour breakdown affecting Punjab and particularly Islamabad got the Prime Minister on air with a worried face and an apology, in Karachi, 12, 14, 11 and eight-hour breakdowns occur night after night but no heads role, no inquiries made and no accountability taken.

Since Dec 1, 2005 – the date when the KESC changed hands and became a private entity for a sum of Rs 20billion, its owners have not returned to the city to look into their company’s or their clients’ interests.

Inquiry reveals that no ground survey of the electricity distribution network has been done by the contractual partner of the KESC – Siemens Pakistan – solely responsible for the company’s operations and management.

With no past experience in the actual process of electricity generation and power distribution, the contractual partners, apparently have no information on the viability or state of decay of KESC’s equipment, like PMTs, jumpers and other small grids, in the city. Hence, when this faulty equipment results in blackouts, the operations department can never fix the problem in less than six to eight hours.

Hired on a six-year contract for a sum of US$9million for its first year and US$8million/year from its second year plus additional variable fee of three per cent or so from all new connections in the six-year term, consumers need an explanation from the contracting firm for creating this grim power situation.

Investigations disclose that when KESC was sold off, an ‘Operations and Management Agreement’ was signed which was approved by the Prime Minister and agreed upon by the buyers at the time of the sale.

This ‘Agreement’ empowers Siemens as a contracting company for six years to, ‘undertake the operations and management functions relating to the business of the company, including supervision of the employees of the company…’ But whereas the agreement also says that as a contracting firm Siemens must, ‘improve the management effectiveness and financial performance of the company’..., there is, no clause of accountability/penalty included in case Siemens fails to provide the necessary services.

Moreover, the KESC has no authority to terminate the agreement before two years and if it does do so after two years, KESC still has to pay the contracting partner 65 per cent of the remaining fixed fee.

Further anomaly lies in the division of duties/power outlined for its Chief Executive Officer (CEO) and Chief Operating Officer (COO). Mr Rolph Bergmeir is the COO from Siemens who is responsible for generation, transmission and distribution of electricity which includes issues of power shortage, faults and load-shedding schedules.

While being directly accountable for the daily power breakdowns in the city, Mr Rolph Bergmeir is most unwilling to offer any comments to the media.

The public face of the company, however, is Mr Frank Scherschmidt (CEO), who appears to be only a figurehead. Scherschmidt’s role as the corporation’s Chief Executive Officer is no more than to bear with fortitude the accusations and insults of the consumers and the press. On a wider basis, it means handling merely the media affairs and customer issues in which he is aided by his spokesperson who too can impart only superficial information regarding supply and demand, nothing beyond!

In the initial days after the takeover, Frank Scherschmidt as the new CEO was seen mingling with consumers and addressing their billing problems individually, creating a positive face of the new private management. But while he told us of all the grand plans in the pipeline, neither the media nor the consumers knew that the responsibility and management of these plans rested with another force.

The promised overhaul that was expected to improve the utility’s performance never took place. One intended step was the large investment plan for computerizing KESC’s entire network to enable the head-office to monitor power failures even before a consumer lodged a complaint. But the computer programme which would also have monitored meter-tampering and power theft is still nowhere in sight.

Eight months down the line and the operating partners haven’t even managed to revamp its complaint centres which are still operating on a ‘clueless’ strategy, having neither information, nor the requisite manners to appease irate customers.

With an air-tight agreement protecting KESC’s operational contractors, one wonders why they will even need to improve their performance since payment is ensured one way or the other. It is the government’s duty to look into the mismanaged state of affairs in the post-privatization period and the unfeasible plan of operation and management that rules KESC.

Services of KESC’s workers are also not being properly utilized since the Human Resource department has also been taken over by the management contractors who have sidelined senior experts within KESC.

With the power situation going from bad to worse, one wonders if the three government board members have any plans of bringing the issue to Nepra’s notice? Nepra as the power regulatory authority can still take suo motu notice of the situation and take a court order to change the inefficient working atmosphere at KESC.