KARACHI, Aug 22: The hearing organized by the National Electric Power Regulatory Authority (Nepra) on Thursday to seek public opinion on the Karachi Electric Supply Corporation’s demand for a tariff hike ended less with a bang than with a whimper.
The few KESC consumers who showed up on Thursday did not launch a frontal attack on the power utility, which made out a case for tariff rise cogently.
The KESC’s financial adviser, Jalaluddin Qureishi, conceded that the power utility’s management realized that its performance was not up to the mark in many areas. “After the takeover of the KESC by the army, the power utility is doing its utmost to set things right — either by taking action against the errant employees or by removing administrative irregularities.”
He said: “Of late, the KESC has been in dire financial straits. There has been a situation when we had furnace oil for only eight hours at the Bin Qasim plant and no funds to buy the fuel. Every day the KESC spends Rs50 million on the purchase of fuel.”
The financial adviser recalled that some consumers had alleged that over the past three years the KESC had increased the power tariff a lot. “The fact of the matter is that in this period the KESC has raised the power tariff by 6.6 per cent with the permission of Nepra. However, in this period the KESC has had to buy furnace oil at higher rates.”
He pointed out that in order to reduce transmission and distribution losses the KESC would have to take administrative steps as well as technical measures. “But since the KESC does not have adequate funds for everyday operations, it cannot spend money on technical measures. If the KESC could afford to take technical measures it would be able to reduce the transmission and distribution losses significantly.”
Mr Qureishi said upon the privatization of the KESC the buyer would have to spend $400 million on the power utility to reduce the transmission and distribution losses. “We have also requested the centre to give us Rs2 billion so that we can take the technical measures.”
The financial adviser dispelled the impression that the power utility had given a substantial increase in salary to its employees despite the fact that the KESC had itself been feeling the pinch. He said: “On December 1, 2001, the government of Pakistan revised the pay scale of state employees. We, accordingly, increased the salaries of KESC employees.”
He added that since 1906, when the KESC had come into operation, the power utility had been providing a certain amount of electricity to its consumers without any charges according to their grades. He assured the audience that this was not a large amount.
Speaking about administrative overhauling, Mr Qureishi said the KESC had taken action against some 640 employees.
The petition filed by the power utility says that “KESC’s finances have been seriously prejudiced by the recent and continuing rises in the price of the furnace oil and by the consequential increase in purchased power prices.
“The price of the furnace oil has increased from Rs9,086 per million ton to Rs11,989 per million ton over the last six months — an increase of 32pc. The 16pc increase proposed in the petition is primarily to address these higher prices. In the event that the fuel prices at the time of the determination are lower than those on which the petition is based, the immediate tariff required (and the base for future automatic tariff adjustment) would be reduced accordingly.”