Convert KESC into a powerhouse of Karachi's economic growth

Mar 06 - 12, 2006

The private sector management has owned the Karachi Electric Supply Corporation (KESC) with all of its merits and demerits with a commitment to convert the organization into a world class utility by removing the black holes responsible to deprive this commercial capital of its real status.

Frank Scherschmidt is perhaps the first CEO in the history of the utility who has the courage to accept the gray areas in the system but with a sense of great confidence to address the problematic areas not in a too far time.

In an exclusive interview to PAGE he observed that KESC is the only fully integrated utility corporation in the country providing electricity to an exclusive territory of 6000 sq. km with 1.9 million registered customers.

He did not blame the Kunda culture depriving the company a huge profit, which is drained out due to 35-38 percent line losses. In fact there must be reasons for the power theft at such a massive scale. He agreed that the tariff structure needed to be reformed. Actually, over the years, the company has lost the confidence of the consumers on the back of bad supplies, a history of inflated bills and in a situation when no independent or neutral monitor exists to give a transparency to the metering and billing system.

As a natural outcome of bad services and bad supplies the utility has to suffer in the form of losing the trust of the customer who consequently become a bad payer. This vicious cycle has to be addressed systematically by improving services and supplies.

Abrupt shut downs of power supplies cannot be justified in any manner, he admitted with the remarks that if the consumers know that they will be facing suspension of electricity during a certain time period the reaction would be different from what it may be in case of unannounced and abrupt failures. This is pathetic and unacceptable he remarked with open a heart.

Frank says that due to unsatisfactory service and absence of customer orientation at the front, the customer feels that he is getting unfair and inequitable treatment on the part of the company.

"Quick, clear and courteous response to the customer is missing amongst the team responsible to handle complaints. The meters totally ruled by the company have also lost importance as a neutral document in the eyes of the customers, consequently the bills are not accepted as trustworthy" these harsh words spoken by the Chief Executive of a company sound as a strange language especially in our culture.

It seems that the Karachiites are lucky to have such a person as the head of an organization, which is known for its policing attitude.

He agreed that a huge market is available but cannot be readily capitalized due to limited capacity of power generation. KESC generates only 40 percent of the total requirement of the city while assets it holds are outdated or worn out. We have to meet the demand in tits and bits through limited power supply from WAPDA and two small IPPs. On the other side resource constraints do not allow the gas companies to supply adequate supplies in the face of extremely expensive furnace oil.

Mission: In order to win the trust of valued consumers, currently our focus is on excellent services and best supply of energy to ensure a profitable organization for the benefit of our shareholders and investors. Besides, making the privatization policy of the country a real success in and for Karachi.

The KESC Chief also agreed that the utility is suppose to take care of the power needs of the society and the economy hence this should be used as a tax collecting agency.

Actually, the electricity bills loaded with different taxes naturally give a bad look and cast a repulsive impression on the consumers, hence the KESC management is in negotiating with the authorities to get rid of the taxes not directly related to the power consumption.

The revolution in the culture within the KESC was evident from the behavior and conduct of the high ups with the junior ones.

Syed Sultan Hasan, the Principal Information Officer told PAGE that the management has arranged supply of safe drinking water to everyone in the KESC Head Office. The CEO FRANK himself to mark the occasion with touch human values presented a Naib Qasid, who served the senior staff for over 27 years a glass of drinking water.

Currently, KESC was generating around 1270 from its own resources while rest of the demand is met through IPPs, Kanupp, DHA and WAPDA. In view of growing demand, KESC will have to go for its own generation to bridge the gap for a huge investment is needed to meet the need, he observed.

It may be mentioned that the direct supply of around 1000mw of power is likely in April this year as soon as the direct link line is developed between HUBCO and the KESC system.