Need for further revamping the system to curb pilferage

June 11 - 17, 2007

Karachi Electric Supply Corporation (KESC) generates and supplies electricity to an area which is bigger than some of the countries. Its new management took over management control with the promise to make substantial investment for revamping generation, transmission and distribution facilities but its customers are going through worst load shedding for the time being. The situation is not expected to improve over the next couple of years, mainly because of self generation being far less than the demand.

It is however heartening to note that the ground breaking ceremony of the first 250MW power plant, under the new management, would be held on 16th June. Earlier it has signed a US$ 125 million agreement with International Finance Corporation (IFC) and another US$ 150 loan agreement with Asian Development Bank. All these agreements are aimed at adding 785MW generation capacity along with improving transmission and distribution network.

It is true that KESC suffers from inadequate in-house generation but its real problem is depleted transmission and distribution network. This on one hand causes heavy technical losses and on the other hand facilitates pilferage through 'kunda'. T&D losses could not be reduced without revamping the system and the system cannot be improved without incurring heavy capital expenditure. According to 94th Annual Report for the period ended 30th June 2006, KESC generated 9,130 GwH and purchased 5,370 GwH totaling to 13,815 GwH. However, only 9,060 GwH could be billed resulting into a loss of more than 34.4% loss.


According to sector experts high T&D losses could be attributed to overhead distribution system, which facilitates Kunda. There are two types of Kundas legal and illegal. Legal Kundas are a temporary connection which remain operational for decades as KESC continues to charge a minimum/maximum amount. Most of these Kundas are without meters and the ultimate looser is the KESC.

Illegal Kundas have proliferated because for years the KESC management was not ready to provide connection but staff was always ready to install and protect such Kundas. This was the reason that in certain localities T&D losses have been as high as 60 to 80 percent. Interesting the highest pilferage was in posh localities by domestic as well as commercial consumers.

However, the highest percentage of theft pertained to industrial consumers. Traditionally the bulk buyers of any product is charged lower rate but the KESC has been following a policy of charging higher tariff from industrial consumers.

In the past the KESC initiated a project called 'Operation Snake Hunt'. This was aimed at removing Kundas from low income areas. However, later it was found out that undertaking such operations in posh localities was most suitable for the corporation as well as its recovery staff.

It is true that new management of KESC can not only be blamed. The ongoing power crises of Karachi are the result of processes and policies of ad-hoc-ism, corruption, inefficiency and bureaucratic control of the State to serve certain interest groups rather than public at large.

It is heartening to note that steps are being taken for the improvement of operational activities. These included ordering of SCADA system, installation of new grid stations, repairs to or replacement of transformers, feeders, LT and HT capacitors, and the laying of additional cable.

The difference in number of units billed and actually consumed did not allow revamping of the system but more importantly overloading of the system leading to frequent breakdowns. However, the condition has improved because the existing system has been sustaining load of around 2,300 MW.

The Karachi Electric Supply Corporation Limited (KESC) was incorporated on 13th September 1913. The Company is listed on Karachi, Lahore and Islamabad Stock Exchanges. The Company is principally engaged in generation, transmission and distribution of electricity to industrial, commercial, agricultural and residential consumers located in its licensed areas. The franchised area of KESC is spread over entire Karachi and its suburbs up to Dhabeji and Gharo in Sindh and over Hub, Uthal, Vindhar and Bela in Baluchistan. The total area covered is around 6000 square kilometers.

The privatization of the Company has been finalized in November 2005 with the transfer of 73% shares of Government of Pakistan along with Management Control. The new management has taken over the charge of the Company, with effect from November 29, 2005.

It is necessary to highlight that during the decades preceding privatization the Company faced grave financial, technical, operational and other difficulties. While the demand for electrical power was increasing at a rate of up to approximately 10% annually no material enhancement of generation and network was carried out.

The Company serves a total customer base of about two million, of which 1.5 million are residential, 411,000 commercial and 22,000 industrial consumers. Reportedly, approximately Rs 1.2 billion has been spent on revamping of distribution network during last year.



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11 KV Underground Kilometers


400 V Overhead Kilometers


400 V Underground Kilometers


11 KV Distribution S/S/PMTs


11 KV Distribution capacity MVA


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