KARACHI, March 26: If the city government levies octroi on electricity entering 18 towns, the Karachi Electric Supply Corporation will pass on the tax to consumers.
This was stated by the KESC managing director, Brig Tariq Saddozai, at a press briefing at the Bin Qasim Power Plant on Wednesday. He said: “When the city government put forward the idea of levying octroi on electricity entering their towns, we went to court. But the court also ruled that the power utility should pay octroi to the city government. Now KESC consumers will have to bear the burden of this additional tax imposed by the city government.”
He said that on the one hand the representatives of the city government demanded that the power tariff be reduced and, on the other, they imposed additional taxes.
The KESC managing director said the city government had made no payment to the KESC since June 2002. He added that the city government owed Rs400 million to the KESC.
He said the KESC would begin restructuring its distribution network, generation system and transmission and grid network when it received Rs13.2 billion from the federal government.
He said the power utility would spend Rs4.2 billion on the restructuring of the distribution network which would create technical deterrents for those who indulged in power pilferage. ”The KESC would spend Rs750 million on the upgrade of the generation system and the remaining amount would be spent on the development of the transmission and grid system.”
He said the supply of inadequate natural gas by the Sui Southern Gas Company had resulted in great losses to the KESC. ”The power plants of the KESC have to consume costly furnace oil because the amount of natural gas needed by the power utility is not provided by the SSGC. The gas utility was supposed to give us 176 MMCFD natural gas from January 2003. In winter they gave us about 40 MMCFD saying they had to provide natural gas to the Northern Areas. These days they are giving us about 70 MMCFD.”
The KESC managing director said if the war in the Gulf prolonged and furnace oil became hard to come by, the power utility would more rely on enhanced supply of natural gas from the SSGC.
Answering a question, he said the National Electric Power Regulatory Authority had ruled that fuel would be a pass-through item in such a way when the price of fuel increased consumers would have to pay more and vice versa. He added that there was a Nepra cap as well which stopped the KESC from increasing tariff by more than three per cent at a time.
When a newsman asked whether the KESC would bring down tariff when it received adequate amount of inexpensive natural gas from the SSGC, the managing director said the power utility would not reduce tariff. “On the other hand, if furnace oil prices continue to go up, the power tariff would be increased proportionately according to the Nepra formula,” he said.
He said the water board laid the blame at the door of the KESC whenever they had a power crisis. “Every utility has a standby system. The water board, too, has a standby generator which has been out of order for years. They have six feeders which are just enough to meet their power demands. Whenever one of the feeder trips, they say that they cannot provide water from their pumping station because of the KESC’s failure to give them electricity. We have taken a unilateral decision that we will install another feeder and recover its cost from them in instalments.”
The KESC managing director disclosed that defaulters owed about Rs20.4 billion to the power utility. He added that in order to recover these outstanding dues the KESC disconnected power connections of some 2,500 consumers every day.
Earlier, the chief engineer of the Bin Qasim Power Plant, Jamil-ur-Rahman Panhwar, told newsmen that the installed capacity of the KESC generating stations was 1,756 megawatts, but the actual capacity was around 1,430 megawatts. “The peak demand for the year 2003-2004 for the KESC licensed area is expected to be 2,000 megawatts. The shortfall of power is met through purchase of power from Kanupp, Pakistan Steel, Tapal Energy and Gul Ahmed Energy and the Water and Power Development Authority.”
He said that after the introduction of the energy policy, in which emphasis had been placed at private sector generation, the KESC had been stopped from generating power. He said the KESC had carried out a study which showed that the power utility could install two units of 210 megawatts at West Wharf and a Korangi Thermal Power stations capable of generating 350 megawatts.
Mr Panhwar stressed the need for supplying the KESC with the adequate amount of natural gas. “The power utility could save Rs142,800 by firing 1 MMCF gas against HFO at the current price of furnace oil.”