Financial constraints

June 07 - 13, 2004

Is the KESC being run by professional hands for the last five years? is the most talked about point in the trade and industry circles these days. The talks on this most pertinent issue, however, generally end on a single point conclusion "the 1.9 million consumers would have been getting uninterrupted power supply at an affordable price, if the utility had been given into professional hands." Opinion leaders in the power sector are of the view that the efforts taken for restructuring of the KESC system seems to be in the direction to achieve the privatization agenda of the power sector in Pakistan. Apparently, the reorganization of the Corporation gives a better view from administrative point of view. However, it is interesting to note that there is absolute contradictions in documentation and preparation for each presentation about prevailing situation in the KESC. On one hand, some aggressive steps were initiated for recovery of outstanding dues from the defaulters and power thieves, but on the other hand, the results of these efforts betray the sincerity of the management in this regard. According to a senior billing officer, some workable suggestions for recovery of the huge outstanding dues were turned down which could have recovered huge amount after only five power disconnection's instead of disconnecting hundreds of connection of small defaulters. The campaign launched by the KESC for disconnection of domestic consumers caused KESC hundreds time extra expenditure at a time when the Corporation was confronted with financial constraints.

The break up of the power theft cases revealed that there are five feeders in the entire KESC system from where almost 100% power is generally stolen. Out of the total, there are 77 feeders from where 80% power is stolen, 181 feeders from where 60% power was stolen, 205 feeders from where 40% power was stolen and there were 350 feeders in Karachi from where up to 20% power was stolen. Instead of going after the small domestic consumers, KESC could have disconnected supply of those 5 feeders which supply power into the posh localities of Karachi.


In the 91st annual report of the KESC, during 1990 there were 20.84% losses of electricity in the transmission and distribution ' system and losses surged to 40.78% last year, that is more than double as compared to the 14 years ago. While following are the figure of losses each year: during 1991-23.80%, 1992-26.04%, 1993-27.30%, 1994-27.47%, 1995-31.37%, 1996-31.20%, 1997-35.53%,1998-34.62%, 1999-38.64, 2000-40.23%, 2001-36.81%, 2002-41.11% and last year that were 40.78. One of the factors attributed to these losses is the theft of electricity, which can not be billed as it is subject to identification, which has directly affected the profitability of the Corporation. This performance result is after Federal Government allocated Rs. 13.7 billion for restructuring the Corporation. KESC spent huge time for the packages announced for the defaulters even the big defaulters, every package according to which defaulters were given relaxation proves the failure of previous package. The last package announced last month says, that there would be 30% concession to the defaulter who pay their entire payment pending against them for the last five years. 25% relaxation to the defaulters who have outstanding bills during three to five years. 20% relaxation to the defaulters of one to three years and 15% relation to the defaulters from six months to one year. This is one of the recent package announced which gives benefits to the defaulters and not a single relief has been given to the consumers who pay their bills on time. This step has also encouraged the regular payers to become defaulters, as they would get relation up to 30%. Identification and disclosure of power thieves names has another scandal, not every one was arrested for power theft, but selected persons were arrested and were taken to the KESC police station in Baloch Colony PECHS area where they were released after 30% of the total amount against them. When demand of disclosure of power thieves increased by the regular bill payer, the matter was gone to the Federal Government and after three months decision arrived to the corporation that power thieves names could not be disclosed as that would defame them in society. However, some of the arrested persons said that they had been wrongly arrested on charge of slow meters and supplementary bills for the last three years were given to them. Many politicians, bureaucrats and people from the fields alleged that they were victimized by the KESC as they opposed the government. They further said that every citizen has five to ten year old electricity meters and can be declared a power thief on the ground of old and slow meters. During summer, citizens remained under the crisis of power failure, load shedding and prolonged power breakdowns and in summer they remained in the crisis of fast meters, wrong billings, change of new controversial meters and meter shifting from inside their premises to outside. There were many good proposal came out from public side, but mysteriously they were rejected. The example of setting up an information center where citizens could report power theft incidents. There was another solid plan of power theft reduction. According to which 1,400 KV distribution on which Kunda could not be put on, as power converter required before use. The pilot project was implemented in Surjani Town two years ago but later the idea was turned down mysteriously. Financial crisis were mentioned as major reason for dropping this plan.