The industrial consumers have welcome the move

Apr 07 - 13, 2003

The Karachi Electric Supply Corporation (KESC) has decided to bring Security Deposit and System Development Charges of the industrial consumers at par with WAPDA.

The positive decision on the part of KESC is expected to encourage a large number of industrial and commercial consumers.

It may be mentioned that a large number of industrial and commercial consumers were avoiding to join in the KESC system for power purchase and preferred to go for selfpower generation which according to official sources has gone up to the extent of 400 megawatt (MW) in KESC licensed area.

Karachi is said to be the largest industrial town where demand for power consumption is growing at the rate of 4 per cent per annum. However, it is unable to meet the demand due to limited power generation capacity. According to informed sources, applications for some 500 MW new connections are pending since long due to short supply in power generation.


Installed capacity of the KESC generating stations is estimated around 1756 MW, but firm capacity is claimed to be around 1430. This firm capacity is doubtful because most of the KESC power generating units has completed their life.

Following is the breakdown of the power units

1. Bin Qasim Power Station 1260 MW installed and 1090 MW firm.
2. Korangi Thermal Power Station 316 MW and 180 firm.
3. SITE Gas Turbine Power Station 100 installed and 90 firm.
Korangi Town Gas Turbine Power Station installed 80 and 72 firm.

Bin Qasim Power Station was established in 1983. Presently the station has 6 units of 210 MW each. These units were commissioned in 1983, 1984, 1989, 1990 and 1997. All the six units have been converted on natural gas but actually are unable to be completely run on gas due to short supply on the part of SSGC.


Korangi Thermal Power Station was established in 1965 with two units of 66 MW each. One unit of 125 was added in 1970. The fourth unit of 125 MW was added in 1977. These units are gas/oil fired.


In order to meet the peak demand KESC has installed Gas Turbine Stations in 1978 and 1979. There are two gas Turbine Station i.e. Korangi and SITE, the hub of industrial areas of Karachi. Korangi Town Gas Turbine was four units of 20 MW each, whereas SITE Gas Turbine has 5 units of 20 MW each.

Beside its own sources, KESC has to purchase electricity from various other sources to meet the demand. Among these sources, Karachi Nuclear Power Station commissioned in 1972 has already come to its age and most of the year remains under service. It, however, has a gross capacity of producing 137 MW but hardly produced 40-70 MW.

Two IPPs operating in KESC's licensed area are Tapal and Gul Ahmed, which are producing a total of 250MW. It is learnt that Tapal which has an installed capacity 126 MW is negotiating with the authorities for expansion of its plant. If it is allowed, it may double its present capacity of 126 to 250 MW.

Though the cost for power purchase from the IPPs has been declined as a result of negotiations and also due to depreciation of dollar against rupee, yet the benefit was offset due to abnormal increase in fuel prices which shot up from 2750 per ton in late 90s to over 12000 per ton as the current oil prices.

Realizing the wide difference between deposit charges between KESC and WAPDA, Board of Directors of the KESC has cut down security deposits and withdraw system development charges from industrial and commercial consumers.

A large number of industrial consumers keeping off the KESC system are expected to come into its fold with the decline in deposit rates, however, it depends on the availability of power with the KESC. Under the policy, the government had capped expansion in power generation capacity of the KESC, which leaves no option, but to meet the demand gap by borrowing power from WAPDA.

The KESC Combining Operation Cell was compelling industrial consumers to pay security deposits at the rate of Rs3000 per kilowatt along with Rs3500 per kilowatt as system development charges, a total of Rs6500 per kilo watt (kW), whereas WAPDA was charging Rs550 to Rs930 per kilowatt under this head.

In case consumers failed to comply with the KESC' demand, they had face power disconnection of their industrial units. Now maximum-security deposit would be Rs1375 per kW instead of Rs3000 per kW depending upon the type of tariff, and there would be no system development charges.

The industrial consumers have welcome the move which, in fact was their long standing demand to eliminate discrimination between the industrial consumers under the licensed area of KESC and WADA.

According to SITE Association of Industry, over 88 per cent exports of value-added textile made ups are manufactured and exported by the industries working within KESC licensed area and were finding it hard to face international competitors on account of ever-increasing cost of production especially because of exorbitant power rates.