The Karachi Electric Supply Corporation (KESC) has to
cater to the power needs of around 2 million power consumers which
include 1.7 legal consumers and the remaining must be the Kunda users.
These illegal users of power at the cost of the genuine consumers really
have a killing effect both on the power supplying companies as well as
adversely affecting economic growth of the country.
According to industry sources, fed up with the
complexities of the system to get new connections or get increase the
load demand, most of the new industrial consumers are shifting over to
the self power generation by installing self-operated generators.
Obviously, this should the most worrying aspect that
electricity consumption has been the declining the share of industry in
The composition of the power consumers indicates that
Karachi is surrounded by industrial sectors all around. The main
industrial estates are the SITE industrial area in the northern part of
the city while another large industrial area is in the east Korangi
Industrial area. The West Wharf industrial area is in the South of the
city while Federal B Area and North Karachi lies in the Central part of
KESC having a capacity of 1250MW has to feed the
electricity demand of the entire domestic, commercial and the industrial
consumers from the available resources. It has to manage the shortfall
by shifting of the cap from industry to the commercial and commercial to
the domestic consumers.
Apart from the captive power plant operated by the
industrial units themselves, the current power consumption is over 500MW
while the industry has a demand to increase another 500 Mw to meet its
The industry circles are of the view that in order to
encourage and push up power consumption of the industrial sector which
is the real driver of the economy, Karachi needs yet another power plant
from 500-100- MW exclusively for industrial consumers.
This proposed plant if allowed would adequately
satisfy the power requirement of the industrial sector and save the
domestic users from day to day load-shedding or breakdowns.
It may be recalled that the management of KESC had
suggested to the Ministry of Power for another power plant either in the
private sector or by KESC itself to reduce reliance on the borrowed
power from WAPDA sources. Currently, KESC has to buy electricity from
two IPPs operating in KESC's franchised area i.e. Gul Ahmed and Tapal
energy. These two IPPs are supplying around 250MW a day, besides a
nominal support from KANNUP and the Pakistan Steel. However, KESC has to
depend on supplies from WAPDA usually gives around 400MW a day to KESC
to feed its consumers.
There seems to be no outcome of the move so far.
Since the government was intended to privatize the KESC, obviously the
fresh investment in power sector should come through the private sector
which has jumped from nil to 50 per cent in power production during last
As far as consumption of electricity by industry
sector was concerned, it grew only by an annual compound rate of 1.7 per
cent during 1991-99. That resulted in its share coming down to 28 per
cent in 1999 from 36 per cent in 1991. It was only after 2002 that
industrial consumption of electricity really picked up. However, during
2002 industrial consumption of electricity grew by 5.5 per cent against
8.7 per cent in 2001, reflecting either a reduced growth of industrial
production during the outgoing fiscal year or else increase reliance on
Despite frequent increases in tariffs since the early
1990s, electricity consumption has managed to hold to a share of
approximately 10 per cent in total commercial energy consumption, with
an annual compound growth of 4.8 per cent for the period.
After registering a small increase since 1997 and a
decline in 1999, electricity consumption has shown strong positive
Consumption of electricity registered a growth in
electricity demand over the last few years can be attributed mainly to a
rise in the number of consumers as a result of village electrification
programs and sustained efforts by WAPDA to put power theft under check.
By end of 2002, the number of electricity consumers was 12.7 million as
against 11.6 in 2000.
Since the introduction of the Power Policy of 1994,
the electricity sector has undergone substantial structural changes. The
policy envisaged the participation of private sector in power generation
through new projects as well as privatization of state-owned units. It
succeeded in drawing substantial foreign investment in new power
generation projects, largely addressing the power shortages in the
As new power generation units were set up in both the
public as well as private sector, the installed capacity of electricity
generation increased from 13.0 Giga Watt (GW) in the financial year 1996
to 17.4 GW in 2000 and subsequently to 18 GW 2002.
The increase in the installed capacity of the country
during the last two years was brought about by the addition of Chasma
Nuclear Power Plant 325 MW, Chasma Hydropower Project 184 MW and Liberty
Power 235 MW.