The Karachi Electric Supply Corporation ended the year by declaring a loss of Rs14.45 billion — an increase of 115.78 percent from the previous year. The KESC had entered 2006 under a new, privatised management of the Al-Jumaih group with promises of provide improved service and hopeful of showing a profit within two years. But an unprecedented increase in electricity breakdowns and resultant power riots are all that the new face of KESC has given to its customers.
The unkindest cut for KESC customers – the 15 million citizens of Karachi – is the astronomical sum of $9million being paid to its operations and management partners, Siemens, for services that have not been delivered. Hired on a six-year contract, the $9million amount is for the first year after which $8million per year by will be paid to them from the second year plus additional variable fee of three per cent or so from all new connections in the six-year term, a contract which the KESC has no authority to terminate before two years, and if it does so after two years, the company will have to pay the contracting partner 65 per cent of the remaining fixed charges.
The Rs14.45 billion losses declared in its annual report include this fee plus the millions spent in refurbishing offices for the operation and management partners. Analysts following the state of affairs at KESC predict even higher losses for the new year.
As a as supplying electricity in 2007, a deficit of 400MW is already predicted, and that too if all other sources generate power according to estimates and no breakdowns occur. WAPDA has already reduced its supply by a 150MW bringing it down to 600MW from 750MW because of growing power consumption needs elsewhere in the country.
The KESC’s own generation in summer will amount to 1500MW provided the present renovation of its power generation unit at Bin Qasim yields the additional power. Adding 50MW from Korangi thermal power station and about 300MW from Kanupp, wind power generation and IPPs, the total available power for Karachi this summer will be only 2450MW, this is 200MW short of the expected demand for the summer of 2007. Any other breakdowns can lead to a shortage of 300MW to 400MW
The plan of setting up a new power plant which was the responsibility of the operations and management partners, has also gone awry amidst rumours that Siemens had bought a second hand power plant at a cost of which could have paid for a new one. The resultant uproars and shelving of that project has given Karachi’s electricity consumers a major setback, since the new plant was supposed to have generated 400MW in 2007 and 500MW in 2008.
Extended and mostly unannounced load shedding is still taking place in Karachi as a shortage of 50MW-150MW prevails despite low consumption because of winter. The reasons why this deficit persists have not not been forthcoming from any of KESC’s spokespersons. The terrifying reality, that if this winter’s low consumption needs are not being met, how the power situation will unfold in summer when all air-conditioners are switched on, is already distressing consumers.
A prudent nation prepares for war in times of peace, but in KESC and the power related ministries, ignorance and disregard for the brewing power crisis is all that can be seen.
The government has 27 per cent shares in KESC and three representatives on its board of directors – Mr Anwar Khalid, member WAPDA; Mr Ashfaque Mahmood, Secretary Water and Power development and Mr Asif Bajwa, additional secretary federal Ministry of Finance – who still have decision making power though they appear to lack vision. If these government functionaries move the board to arrange for alternate power sources even now, we might see some relief in the coming summer. A number of options are being given by experts which can be put into action, including import of mobile power generators and easing government tariff to induce new IPPs to set up generators/plants.
With effective government monitoring and an active role played by Nepra, the inefficiency of KESC’s new management and its operational partners can still be checked if citizens’ interest is anyone’s concern. Criticising privatisation at this juncture will not serve any purpose. However, a strict check on KESC’s management in the interest of the citizens is strongly recommended and the government must intervene to ensure this. Meanwhile, one wonders will the citizens be left to suffer the same ordeals of summer due to power breakdowns and load-shedding in 2007?