ISLAMABAD, Oct 8: A meeting approved here on Tuesday Rs8 billion additional supplementary grant for the Karachi Electricity Supply Corporation (KESC) to help pay off its liabilities to the Water and Power Development Authority (Wapda).

The meeting, presided over by President Gen Pervez Musharraf, approved Rs10 billion additional supplementary grants, including Rs8 billion for the KESC and Rs 1.3 billion for the Wapda.

Finance Minister Shaukat Aziz told Dawn after the meeting that Rs1.3 billion additional grant had been offered to Wapda to spend more on Ghazi Barotha during 2002-2003. The amount also includes Rs500 million to Wapda on account of payment of arrears of Azad Kashmir government. Similarly, he said, some additional supplementary grants would also be offered to couple of other organisations.

He said the meeting reviewed the resource position of the KESC and decided to offer it Rs8 billion additional supplementary grant during the current financial year.

“We hope that this new funding will bring improvements in KESC’s financial health,” Aziz said, adding that the government would now make sure that KESC’s line and distribution losses were reduced considerably.

Earlier, the National Electric Power Regulatory Authority (Nepra) allowed in September last an average 6.5 per cent increase in consumer tariff to the KESC.

INCREASE RATIO: The increase has been granted for domestic consumers using up to 50 units per month while beyond this limit the household consumers would be charged 27 paisa per unit higher than the existing rate.

An average 27 paisa per unit increase has been allowed for commercial consumers, 36 paisa per unit for industrial consumers and 28 paisa per unit increase for average bulk consumers.

The rates for agricultural tubewells in Sindh and Balochistan have been increased by 62 paisa and 60 paisa, respectively.

Nepra has introduced a claw-back mechanism for sharing of excess profits accruing to the utility, if any, in a year with consumers. The excessive profit beyond a reasonable real rate of return would be shared with the consumers in the shape of a reduction in tariff in the following manner:

If the profit is 12 to 15 per cent beyond a real rate of return, 25 per cent would be passed on to consumers and 75 per cent would be retained by the utility. If the profit is more than 15 to 18 per cent, the sharing between the consumers and the utility would be on the basis of 50:50 basis. In case, the profit is 18 per cent higher than the real rate of return, the utility would retain 25 per cent and pass on the remaining 75 per cent to the consumers.