BETWEEN HOPE AND DESPAIR

Summer is always a challenge for KESC

SADAF AUARNGZAIB
July 03 - July 09, 2006

As the summer progresses to its heights and the heat waves are hard to bear, the current load-shedding by the KESC has stirred riots in several parts of the city. As the situation worsens, we contacted the Principal Information Officer, Syed Sultan Hasan of KESC to know the real situation. On the grim situation of KESC he said that you can't change an organization which has ills of about 50 years in a day...let's share his voice and concern in this regard.

PAGE: Taking in view the rising electricity failures in the city, which has disrupted civic life and stirred several riots in the city, how do you see the situation?

SYED SULTAN HASAN: How I see the situation is that it is not a question of failure, we have a power shortage of about 200 to 250 MW in Karachi this year and this power shortage is because of the rise in the power demand every year by 7%. There is a rise of 7% (that is equivalent to about 200 to 250MW) power demand every summer when power consumption reaches its maximum.

Last year we managed it within 2100MW with the supply that we had and that was also at the saturation point. KESC produces 1250MW of power, and there are two other independent power producers that supply KESC about 250MW of the electricity, then WAPDA also supply KESC around 600MW, last year we were getting this quantum of electricity and last year the power supply and demand position was neck to neck. There were also few lapses as power supply did not remain constant during the twenty four hours, sometimes it is used at 2000MW, sometimes it is used at 2100MW so at different times there is a different level of consumption and according to that KESC is giving the supply. What a power supply company should have is we should know that how much power may be needed during the twenty four hours on any particular day and then we divide the twenty four hours into day peak hours and evening peak hours. Last year we could meet those two peaks but this year we remained unable to meet those peaks because power production and power generation is at saturation in Karachi. We were expecting some extra power supply from WAPDA but WAPDA has repeatedly told us that they could not supply us more than 600 MW of electricity so there is a shortage and we cannot meet about 10% of the city power demand.

PAGE: The reason for the current power failure has been stated as the WAPDA's sudden termination of power supply from one of its two links at Jamshoro... what is the truth behind?

SH: Those are transient breakdowns. WAPDA was previously supplying us electricity from two circuits via Jamshoro, these two circuits were of 300MW capacity each but they are very old circuits. In the year 2003 when the chairman WAPDA and chairman KESC was the same person, Lt. Gen Zulfiqar Ali Khan, it was his vision that we should have a direct link with Hubco (because Hubco is only 38km away from our Baldia station), and the electricity that WAPDA is providing us through Jamshoro used to travel about 186km and during this lengthy transmission we were losing around 20 to 30MW of electricity.

Hubco has a capacity to produce about 1200MW and it was considered that a new link should be built up near our Baldia grid station as there is no link between Hubco and KESC. The whole project was approved by the government and it was Rs.3 billion project and we were expecting and people were also told by the high ups of WAPDA, Ministry of Water and Power and KESC that the new Hubco link will be ready in the year 2006 and Karachi would be getting 1000MW power supply from these two links but what has happened is that so far interconnection has been made according to the time schedule and it was ready in the first week of May this year but for the time being there is only one power transformer over there which can only transmit about 510 MW of electricity and the other power transformer is yet to come.

Also what has happened is that at Jamshoro link there were two circuits, out of those two circuits one of the lines has to be opened up by WAPDA and they said that they have to do the maintenance because they are certainly very old lines and need major maintenance.

PAGE: But what about the peak summer time?

SH: They said that they would be supplying us 600 MW of electricity and we can utilize one of the Jamshoro link for getting about 300MW of electricity and the 300 MW can be provided to us from the Hubco link.

For the time being unless that other cycle comes up we cannot avail more than 600MW of electricity.

PAGE: When WAPDA and KESC have already had a deal regarding Hubco, why the whole thing is delayed, when will KESC start buying directly from Hubco?

SH: Hubco is basically WAPDA's IPP, they are under contract with WAPDA that whatever electricity they will produce they will supply to WAPDA and in case WAPDA cannot take 100% production of Hubco for use, WAPDA will pay Hubco capacity charges, they will pay for the quantity of electricity that they have availed plus they will pay capacity charges in case some of the power generating units have not done work. Because of all this we cannot directly approach Hubco and whatever electricity we will get from Hubco will always be WAPDA's electricity and we will be WAPDA's client and not Hubco's directly. Once that agreement ends up from WAPDA or the time period of that agreement lapses, we may approach them or have a direct agreement with Hubco but not now.

PAGE: As you have mentioned that the new link will take time, how long do you see it will take to its final completion and how long will KESC cope with it?

SH: As far as KESC is concerned under its new management, we have already decided that we have to carry out major up gradation work from the KESC's own side because we are in the business of selling electricity and the more we see, the more we earn and there is a lot of potential for electricity market in Karachi but right now during June, July and August we cannot start the up gradation work.

We knew about the current situation since January that it will come on surface and the CEO and myself had already started telling people that there would be massive shortage of electricity. We also requested WAPDA for extra electricity but they refused, they also knew that there would be shortages and we would have to carry out the load shedding because there would be no other way. One thing that I also want to mention is that why we cannot announce the load shedding according to a timetable and cannot inform people in advance as a power utility service can only inform in advance when they are producing the entire demand themselves, what KESC is doing is only producing 50% of the electricity that they could supply to the city, the rest of the 50% electricity is imported either from WAPDA or from other two IPPs so we are never sure and we never know in advance when WAPDA will reduce their supply or when one of the IPPs may need to shut down one of their units that tends to lower down their supply to us.

Because the demand is exceeding the supply and in such a situation the only way to keep the power supply to the city intact is by shutting off certain areas because if we do not do that what will happen is that our power generating stations will trip and the entire city would be without electricity, so for the fear of our power station's tripping we have to carry out load-shed whenever the demand exceeds the supply. Since we are only producing half of the electricity and importing the half, we never knew that when the supplies are going to be decreased from these sources so for the time being we can't announce in advance about this load shedding.

The another problem is the breakdown. Breakdowns do happen because our entire transmission network of the city is highly over loaded. Right now we have about 52 grid stations and in those 52 grid stations there are 102 power transformers; the ideal situation would be that each power transformer if it has a capacity of 100 units, it should be supplying to its consumers about 80 units but what has happened is because the entire system during the last twenty years was not up graded and the number of consumers and the demand has been increasing so people kept getting connections and the load on these transformers, transmission lines and the distribution lines and on the network kept on increasing. Right now the situation is that all these transformers are overloaded to the extent of 112%, 115%, 120% so what happens is when during the summer, first the outside temperature heats them up and then the extra effort to supply over and above their capacities further heats them up hence the situation results in fires. Like the two major fires in two of our grid stations, one at the Gizri grid station and the other at the Queen's Road grid station, it was basically because of the overloading, so in order to keep reducing the load from these transformers and to keep them cooling down what we do is that we shut down certain areas where we feel that the power transformers are getting overloaded. Yet there is another threat of sabotage on our major transmission lines for which we have also contacted the federal and provincial government authorities and other law enforcing agencies and with their help we will manage to reduce these line cutting of our major extra high tension lines which use to bring the major power supply to the city. These are the kinds of impediments that are there to be handled.

PAGE: Talking of the privatization, how progressive do you think KESC is in meeting the requirements of the city as we have experienced its inability in making out any plans for this summer?

SH: In any city when the power demand increases by about 7% on an average annually then you need to plan your power generation, transmission, distribution and human resource on a ten year basis. The new privatized management took over the corporation in Dec 2005, till February they had to evaluate and identify the weak points and the strong points of the organization to keep the services on for 24 hours.

PAGE: How do you think KESC would manage the gap between demand and supply in future?

SH: We will manage by increasing the power generation, transmission, distribution and human resource according to the system demand for the next summer and all this work cannot be carried on right now when we are already facing a shortage and there is a maximum use of electricity at this time. We need to work on our electrical system for which we need to do shut downs, we can't do those shut downs during this time of June, July and August so we have already chalked out a very comprehensive program to work on the system between September and April when the power demand also decreases by 200 to 300MW, though it will decrease but still we need to shut down at time but those are the shutdowns which we can explain and inform in advance. This is our plan to carry out our future plan.

PAGE: Electricity is getting expensive, however, the consumers are still deprived of the continuous supply of this utility. What's the purpose of then adding up to the cost of electricity?

SH: Basically the power tariff is determined by NEPRA (National Electric and Power Regulatory Authority), it's a government body and it's there to see and protect the interest of the consumers. One must realize that electricity is expensive all over the world. In our circumstances it is more expensive because we have to import furnace oil. In Karachi the electricity we get is produced either through furnace oil or through natural gas. At times we don't get the required quantity of the natural gas so we have to generate electricity through furnace oil, the price of gas has also increased so the production cost of the electricity is certainly higher but still according to the input, the power tariff has not been increased only to protect the consumers. After privatization I think the price management will have to work out plans with which they can give tariff incentives to their consumers by finding means and lowering the input cost of the product by which they produce electricity. The first power generating station which will be giving about 500MW of electricity will be a combine cycle power station, it is the most latest and modern plan which will initially produce electricity through gas and then they have a cooling system at the generating plant which produces steam, the remaining half of the power station will work on steam. We also are looking at the alternate sources of electricity i.e. wind energy, cold fire, etc. to bring down the cost of production. Once the company achieved the lower cost of production, it will have to work out tariff incentives for their consumers.

PAGE: How many power stations KESC holds?

SH: We have our own power station - Bin Qasim power station - that produces about 1000MW of electricity, then we have a very old thermal power station at Korangi, and the combine cycle plant which we will put up would be another power generating station that would be added to our system.

PAGE: One thought is also that if KESC could succeed in meeting its needs through its own power stations, it will become independent of WAPDA. Do you think WAPDA is playing some politics here?

SH: KESC is a successful company and it is absolutely independent of WAPDA in the sense that it is now a privatized company but WAPDA is a public sector organization, it's an authority. There should be no politics. If someone tries to use politics in the utility which provides the structural support to business, industry and residents, that is not good, it should be free of politics.

PAGE: Is this true that WAPDA has sufficient power available with it?

SH: The kind of statements that are on record do make us feel that they may have some extra power but whenever we have requested them they said they have their own problems, they can't give us more power.

PAGE: How is KESC planning to deal with the Kunda and other unauthorized use of electricity?

SH: There are projects which are already in place. What KESC is doing right now (which we will be using for our own distribution system) is introducing cables which are called Ariel bundle cables in which all the three phases and the neutral are concealed in a PVC (rubber) and nobody would be able to put Kunda on them and the whole network will also look clean. That is how we plan to start power distribution in areas which have more Kundas or which are Kunda infested areas. This cable is not manufactured in Pakistan so far so we are importing it from Canada.

PAGE: What about other unauthorized use in other ways?

SH: In other different ways, we have to improve our meter reading. People don't trust our meters; we have also requested that government should put up an independent meter calibrating laboratory under the high standards so that if anybody has any problem regarding their meter or they doubt their meter they should call in because so far only KESC checks the meter that whether its working right or not. Once there will be an independent body, each consumer will have the right to get his meter checked. We are also looking into the possibility of electronic meter reading to minimize human error as much as possible and better recording of the consumption units but then all these things take time to happen.

The most important thing for the people to understand as they keep accusing that the management has not done anything or they haven't planned anything but in electricity nothing is available off the shelf. We can't go to Bohri Bazaar and buy a power transformer, power generator or cables etc, there is a time schedule for each thing. There is a time for tendering, once it is approved, then placing order takes time and after that manufacturing company takes time to produce it, it takes ten months to manufacture a single transformer. Once the power transformer is manufactured and is brought to Karachi, it takes four weeks to install it at a grid station. Even if you want to do it on a very fast track, you can't complete it before two weeks so the minimum is two weeks for putting up a power transformer at a grid station.

Electricity utility is a kind of service that has a bad history now so no matter what I say, people will not feel comfortable unless they start feeling the change in the service and the quality of supply that they are getting. The new Chief Executive Officer Frank Smith has a very clear vision about it, he says that our problem like unpaid dues by consumers is because of the bad supply and bad service and there is no interaction with the consumers and as we can't change the consumers so what we need to change is the organization and surprise our consumers then we will have good payment and good relation with our consumers. He has this vision with which he is trying to change the culture of the organization. All the operation and management part of the company is being looked after by Siemens because they are the operation and management partners of the new management of KESC. I think there is a lot of potential in the organization but the thing is that the new management should be given enough time and after that should be made accountable. I think the accountability or the quality of managing the Karachi utility can be examined once they complete full one year of service.

PAGE: Why can't KESC educate people about energy saving as it would help sustain the balance of electricity to some extent?

SH: This was missing in the past too because it was a public sector organization and for doing all these public service campaigns cost money and KESC was short of funds even to upgrade their system, however, with the new management and the new investment we have started doing all those things. We have started a media campaign for the last two months and advising people to conserve energy. We have about 20 million consumers. If each of our consumer saves 100 watts that means you just have to shut down a 100 watt bulb and that could save the amount of electricity which is the production capacity of one of our generating units at Bin Qasim. Electricity is a public utility and it is consumed by the entire country, there should be an effective cooperation, coordination and relation between the utility and the consumers and each of the two segments should understand each other's problem and should exercise to utilize and protect this utility as best as possible, only then it can function at the highest level and according to the desires and wishes of the consumers.

PAGE: Tell us how long do you think this current situation will prevail and what is the long term solution for that?

SH: We try every day, every hour, every second to improve the situation. We have problems of shortages, unskilled engineers and workers and a lack of good corporate culture. All these things take time to be introduced into an organization because if an organization has been running for a long period on a certain pattern, it takes time to change those patterns and habits. I think we just need to provide our people with a good corporate environment and once that environment is arranged through the new management, things will be changed.

Talking of the current situation, we are not in a perpetual state of electricity failure. I have explained the problems; with all these shortages we still manage to supply 2100MW of electricity what we cannot supply is the odd 100, 200, or 300MW at different times which is 10% of the power demand of the city. We can't supply only because we don't have the means and resources to supply that. This we are working on and once we have our power plan ready by September and April, the situation will improve, besides that if people come down to power conservation that can also be very helpful. Like the Shop Act that has been introduced recently to curtail the electricity failure chances by shutting down the shops and offices after 7 in the night is a very good step by the provincial government. People are confusing it with consumption of energy, it is basically a law that is also adopted by the ILO Geneva Convention in order to determine the working hours of the workers and labors so that nobody should be able to take free labor from any human being. For that purpose even in the world's biggest metropolitan city London, Oxford Street closes down after a certain time and you can't run your business after that. These things are planned by the society keeping in mind the kind of infrastructure, the kind of utility services we have and how do we can adjust to those things.

We also have Shop Act as a part of our law which was adopted by the then West Pakistan Assembly; it was in practice in Karachi till June 2000 and then because of some reasons the then government suspended it for some time and then the people forgot about it. Now because there is a shortage and after sunset when the businesses, shops and offices are all opened while the residential area also start consuming so there is a major load of 700 to 800MW of electricity so in order to deal with the situation the provincial government has introduced it again. Other than that one of our longest span of extra high tension line (Civil Aviation Landhi circuit) was broken because of being obsolete. That line had been fixed and since then a lot of over loading of our other circuits has also reduced and there is a fraction of improvement of our supply situation which has become very bad because of the breakdown of the line. So these are the little things that we keep doing to improve the power situation but whenever the demand crosses 2100MW, we can't do anything than load shedding and if somehow government decides or WAPDA overcomes their problem and start supplying us the extra electricity of about 150 to 200MW then the shortage of generation can be fixed otherwise we have already planned to build up our own power stations in Karachi.

PAGE: Any message to public?

SH: Please save electricity, it is very important. Even in developed societies the children are taught to save water and electricity. We should remember to switch off all the possible gadgets that are not in use. We should not leave the electrical equipment even on standby as that will also add to our consumption cost.

CONSUMPTION OF ELECTRICITY BY SECTORS (000 GWH) 
(PERCENTAGE CHANGE)

YEAR

HOUSE HOLD

COMMER-
CIAL

INDUST-
RIAL

AGRICUL-
TURE

STREET 
LIGHT
(TOTAL)

OTHER 
GOVT.

TOTAL

 

%Chg

Gwh

%Chg

Gwh

%Chg

Gwh

%Chg

Gwh

%Chg

Gwh

%Chg

Gwh

Total

17.1

9.6

2.2

-15.4

12.1

-3.2

6.7

8.1

378

16.7

2.4

14.3

41.7

1995-96

17.8

4.1

2.2

0

11.9

-1.7

7.0

4.5

390

3.2

3.4

3.0

42.9

1996-97

18.8

5.6

2.3

4.5

12.3

3.4

6.9

-1.4

387

-0.8

3.9

14.7

44.6

1997-98

19.4

3.2

2.4

4.3

12.0

-2.4

5.6

-18.8

224

-42.1

3.6

-7.7

43.3

1998-99

21.4

10.3

2.5

5.2

13.2

10.0

4.5

-19.9

239

6.7

3.6

0

45.6

1999-00

22.8

6.5

2.8

12.0

14.3

8.3

4.9

8.9

213

-10.9

3.5

-2.8

48.6

2000-01

23.2

1.8

3.0

7.1

15.1

5.6

5.6

14.3

212

-0.5

3.5

0.0

50.6

2001-02

23.7

2.2

3.2

6.7

16.2

7.3

6.0

7.1

244

15.1

3.4

-2.9

52.7

2002-03

25.8

8.9

3.7

15.6

17.4

7.4

6.7

11.7

262

7.4

3.7

8.8

57.5

2003-04

27.6

6.8

4.1

10.6

18.6

7.1

7.0

4.8

305

16.4

3.8

2.7

61.3

2004-05

17.1

9.6

2.2

-15.4

12.1

-3.2

6.7

8.1

378

16.7

2.4

14.3

41.7

Jul-Mar

2004-05

19.9

 

2.9

 

13.8

 

5.2

 

225

 

4.3

 

46.3

2005-06

22.1

11.4

3.4

15.9

14.7

6.5

6.0

15.6

261

16.0

5.7

31.2

52.1

Source: Hydrocarbon Development Institute of Pakistan