KARACHI: The Karachi Electric Supply Company (KESC) has increased generation capacity by 1,006 megawatts (MW) and made investment of $1 billion since take over in 2009 and increased its efficiency by 10 percent (from 30 percent to 40 percent).
The Asian Development Bank (ADB) Press Mission was told that there are some structural issues between the government and the KESC management, which required proper mechanism through involvement of meaningful people. The government promised that it will provide 276 million cubic feet per day (MMCFD) gas to the KESC but now it provided only 80 MMCFD gas resultantly, the company run over lower against the installed capacity. If the government unable to honor its commitment, provision of gas, then how other private investors will participate in privatisation policy of the incumbent government.
The private utility has made recovery of 50 MW from existing plants, currently 41 percent of the capacity is less than five years old. The KESC has planned/initiated several projects of power generation, distribution and others upon their completion the fleet capacity will increase power generation and will result in an increase in efficiency 17 percent increase in average fleet efficiency through addition of new efficient plants and major overhaul of three units and effective annual maintenance at old Bin Qasim Power Station (BQPS). During the year 2009, the KESC has established proper load shedding policy under which 100 percent power supply was ensured to 59 percent power consumers, who fully paid and also to the strategic installations. There was 5.0 percent transmission loss, which now reduced to 2.5 percent due to several measures.
The KESC management claimed that most efficient plants have been installed but due to non-availability of gas facility they were either closed or running under capacity, resulting load shedding in some part of the city. The ADB Press Mission was informed that since 1992-93 and till 2005 not a single unit of power generation was commissioned in Karachi power generation power generation company. The KESC management has converted its two power plants from gas to coal and applied for NEPRA for tariff determination in Feb 2013 but still no response.
The provision of financial assistance from ADB and IFC are showing success story of the KESC but on the part of government the response is very pathetic, which may discourage foreign investors to the privation policy of the government in future transactions. Taking over just four years ago, the KESC management has introduced value creation across all aspects of our operations and the financial performance has improved year after year.
The KESC of today is providing thought leadership to the entire power sector, many of our interventions have been acknowledged as best practices by experts of the power field, including the state and the corporate sector of Karachi. Since the last four years, there has been significant financial & operational improvement and the company is now strongly positioned for future growth.
About the financial position of the country, the ADB Press Mission was told that total receivable of the KESC is Rs 145.98 billion for all sources including federal, provincial governments, other sources and totally liabilities is Rs 58.82 billion.
The KESC top management also informed journalists that it fulfilled all commitment it made with the government. The private utility is following the restructuring policy and retrenched about 5,000 employees of the company and provided them golden handshake facility. However, the KESC management claimed that there was no provision in the privatisation agreement regarding protection of employees rights of the KESC, otherwise it will be shown in the courts in several cases.
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