Subsidy on additional surcharge withdrawn
By AMANULLAH BASHAR
Nov 22 - 28, 1999
The electricity consumers will be required to pay 30 per cent more in
their electricity bills as a result of withdrawal of 50 per cent subsidy on additional
surcharge from the billing month of October, 1999.
Previous government had announced relief to electricity consumers
because exorbitant power rates were one of the major reasons for power theft which
according to an assessment goes up to 40 per cent both in WAPDA and KESC systems. The new
management now claims to have brought down the losses from 39 to 34 per cent and aiming at
reducing to the level of 27 per cent. Reduction of one per cent in loss amounts to saving
of Rs400 million.
The decision of recalling the relief was also taken by the previous
government as it was pressurised by the IMF to withdraw subidy and increase POL prices in
order to increase revenues. Central Board of revenue had fixed the revenue collection
target for at Rs348 billion for the current fiscal in consultation with the IMF.
On the advice of the present government WAPDA and KESC however offered
a 50 per cent cut in power tariff for tubewells to give a helping hand to the agriculture
Commenting on the withdrawal of government subsidy, Yaqub Karim, former
Chairman of SITE Association of Industry said that withdrawal may not bother to the
manufacturing sector. Whatever the increase in bills may as a result of withdrawal, it
would be passed on to the consumers. However the export oriented industries may suffer as
the cost pushing factor may render them incompetitive in the export market.
He said that heavy taxation plus high cost of utilities altogether have
already taken the toll by bringing down the industrial investment at the lowest ebb in
The government instead of increasing the power tariffs have withdrawn
subsidy which amount as good as increase in power charges.
Reduction in power charges by Nawaz Sharif government was the step
which had received wide spread appreciations from all corners of the country. The utility
charges in Pakistan are already beyond the reach of the majority of this country. The high
rate of power charges is only major reason for high rate of pilgerage and theft of power
all over the country.
People in general have welcomed the change in the government in the
hope that they would get some relief as a result of change in the set up. People had
started expressing hatred against the political governments either led by Benazir or Nawaz
Sharif because contrary to their promises and slogans of serving the poor they continued
to increase prices of essential items like fuel, electricity, gas etc which for increasing
the government revenues on the advice of the IMF or other lenders.
How masses could be punished for the stupidity of the rulers or the
authorities. Who is responsible for 39 per cent losses of electricity both in WAPDA and
KESC. How the recovery of losses caused by power thieves or the defaulters could be
justified through increase in power rates. The average income of the masses is not more
than Rs5000 a month. How a vast majority of this country could afford to buy the necessity
of electricity at such a high rate is the question initing the attention of military
government which has come with the determination to revive the economy of this country.
KESC has a huge amount of over Rs18 billion outstanding against the
defaulters. A major chunk of this default was stuck up due to wilful and powerful
defaulters. Now the KESC has started speedy recovery of that amount. The KESC management
should share the recovery of the defaulted amount with its consumers who have already
suffered a lot due to default which led to inflated bills, frequent power breakdowns and
loadsheddings. People were attaching hopes with the new government of getting some relief
in exorbitant power charges. Contrary to that expectations, withdrawal of subsidy has been
The Karachi Electric Supply Corporation (KESC) has chalked out a plan
to rehabilitate its transmission, generation and distribution systems at a cost of Rs 2.18
billion during the current financial year.
The rehabilitation programme includes installation of 39 additional
feeders and 400 pole mounted transformers(PMTs) for which an additional amount of Rs583
million has also been earmarked.
Army had taken over the charge of KESC on May 29 since then an amount
of Rs839.7 million has been spent for improvement of generation system. When the new
mangaement took over the line losses stood at 39 per cent which include 19 per cent
transmission and distribution losses while 20 per cent administrative losses( on account
of theft). Karachi requires 1750 mw of electricity during summer against which the KESC
generates 1100 mw and for the rest of it had to import 650 mw from wapda, ipps , Steel
Mills and KANUPP.
The Karachi Electric Supply Corporation has also launched a
simultaneous crackdown on its defaulters and so far has disconnected supply of 120
industrial units in Karachi.