The new power plant, expected to meet the growing power demand, is the first project in the last 11 years to support the overloaded generation network of the utility. It is scheduled to commence generation by March 2008.
In view of the concerns of Karachiites upset by persisting load-shedding, Sindh Governor Dr Ishratul Ibad Khan, who was the chief guest at the ceremony, called upon the Saudi investors to keep the plight of the people in mind and take measures to bring an end to load-shedding. He advised the new managers of the Karachi Electricity Supply Corporation to associate private enterprises in establishing power plants.
He also referred to corrective measures being taken by the government that included supply of more gas to the utility. He said that restrictions on captive power plants were being eased by the National Electric Power Regulatory Authority to meet the power shortage in Karachi.
Describing the new power plant as a milestone, the governor pointed out that the KESC had a very significant role in the development of Karachi as it empowered the industrial, corporate and domestic sectors. He said it must be kept in mind that Karachi was the economic hub of the country and anything that affected the city’s progress cast its effect on the country’s economic growth.
Spelling out the reasons for the privatisation of the KESC, which has a customer base of 1.8 million, the governor said that it was meant to overcome the financial losses because since 1999 the power utility had been incurring losses to the government which had been offering subsidies to keep the corporation running. Besides, the KESC was privatised to meet the power shortage due to generation, distribution and transmission problems, he said, adding that the most important aspect was to overcome ‘trust deficit’ regaining the faith of consumers in the KESC in becoming an affordable and reliable source of electricity.
Realizing that the corporation was being sustained on subsidies, he said, the government considered it not feasible to revolutionise the technological infrastructure of the KESC. However, he said, it could neither be left unattended to nor an overnight change was possible.
Appreciating the workforce available to the KESC, he emphasised that it was in the interest of both the management and its workforce to join hands and complement each other as they were experienced in KESC’s operations.
Earlier, KESC Board of Directors Chairman Abdulaziz Aljomaih said: “As a Saudi establishment, we would like to assure our Pakistani brothers that we are in Pakistan with a long-term commitment to be a part of the social and economic growth of the country.”
“To meet our financial commitment, we invested US$ 100 million in the form of preferred stock and also provided financial assistance of US$ 50 million to support the operational deficit of the company,” he said, adding that the 220-megawatt power plant at Korangi Thermal Station was part of the expansion plan of the KESC.
Highlighting the recent agreements signed by the KESC, Mr Aljomaih said: “The management of the power utility has been working with multilateral agencies like IFC, ADB and several local banks to fund the capital expansion plan of three years amounting to over US$ 800 million that will bring 780 megawatts by the year 2009.”
Mr Aljomaih said at the time of acquiring the KESC, “we were aware of the fact that we will be faced with political, commercial and technical challenges. Bearing them in mind, we still went ahead with the acquisition because we believed that in the long run, this asset will provide good returns. As a Saudi establishment, we would like to assure our Pakistani brothers that we are in Pakistan with a long-term commitment to be a part of the social and economic growth of the country. For this reason, the KESC was the perfect acquisition, being the economic powerhouse of Karachi,” he said.
The KESC Board of Directors, he said, was in the process of evaluating the final bidding of 560 megawatts, which would be awarded in the next couple of months. He said once the three-year rehabilitation and capital expansion programme was completed, KESC’s reliability would improve from the current 70 per cent to 90 per cent by the next year along with own generation by over 1,000 megawatts. Nevertheless, he admitted that there were a lot of challenges in terms of meeting the expectations of Karachiites and the government. He said his company was also looking forward to investing in other assets like Pakistan State Oil, gas companies and other energy-related assets.
KESC Chief Executive Officer S.M. Amjad gave a detailed briefing on the power utility’s network and future plans.
Meanwhile, there were reports of power outages from many parts of the city from 2am and 5.30am on Saturday. The worst-hit areas included Gulistan-i-Jauhar, Malir, Saudabad, University Road, Safoora Goth and adjoining areas besides parts of Gulshan-i-Iqbal. The KESC denied any load-shedding but did not rule out the possibility of breakdowns.