ENQUIRING LOGIC IN TARIFF INCREMENT DEMAND
KESC STILL NEEDS TO MEET ITS COMMITMENTS
TARIQ AHMED SAEEDI (firstname.lastname@example.org)
Sep 21 - Oct 04, 2009
Can Kesc offer a single logical reason of why it is given a go-ahead to increase tariff of electricity? Load shedding is back with unannounced schedule and the company still needs to meet its various commitments that it agreed to under the privatization deal. The company has filed a petition to National Electric Power Regulatory Authority (Nepra) in which it requests for increment in electricity tariff by Re. 1 per kwh because of its incurring additional cost of Rs0.36 on fuel purchase and Rs0.64 on recurrent operational and maintenance expenditures.
Nepra did not permit tariff raise in the first public hearing adjourned until next month, it could neither give out final words during this dialectic recently held in Karachi and attended by representatives from Nepra and Kesc as well as interveners, who pursue a strong case against tariff increment, and public participants. Nine interveners include industrialists and social workers who find demand of tariff rise in contravention of privatization agreement that stipulated non-review of tariffs on monthly or quarterly basis, whereas Kesc perhaps wants revision in the modalities of the agreement.
Besides, Kesc is not providing efficient services to its consumers and it has proved its incapability of controlling technical and non-technical line losses, contends Dr. Qazi Ahmed Kamal, who is one of the interveners. While there is an urgent need of overhauling the dilapidated distribution system that causes technical line losses and results in non-technical losses as well, the company's priority expenditures are eccentric, he tells this scribe. It is spending relatively small amount on revamping of distribution network or minimizing transmission and distribution faults, but the company is profligately coughing up money on perks and fringe benefits of executives, directors, and officers.
For example, on repair and maintenance the Kesc spent Rs440 million during 2008, up Rs40 million from Rs400 million in 2007. On salaries and other benefits, however, the company recorded expenses of three billion rupees during 2007. It spent Rs3.58 billion on this account in 2008. It is sheer double standards on the part of the Kesc's management that it remains oblivious of vociferous pleadings of consumers- blood of the company- who are inflicted with load shedding half day in a day by dispensing inefficient services for which it is charging heavily. Conversely, it is planting contingent of executives and directors in its top and middle level managements against royal compensation.
Critics argue foreign origin lynchpins of the company are obsessed with the idea of corporate culture and mistakenly are finding solutions of urban power sector in it. Paying in dollars, spending on public service ads and strategists are good idea when rank and file is in order and service delivery fits in customer satisfaction boundaries. Otherwise, all these can backfire and swell on financial setbacks. Kesc's management is in delusion nowadays since it is trimming upper portion and ignoring festers in the bottom. Content lower staffers can be leader of turning the company around and therefore they must be under affects of reorganization, if it is.
That decrepit network is a key root cause of crisis is repeated several times. Kesc not paying heed to it and delaying investments in to rejuvenation of transmission and distribution (T&D) is creating doubts over the intention of the company, which has failed in performance of both distribution and generation. Admittedly, the structure of power sector of Karachi is fast becoming complex due to mushrooming population. But, it was it when UAE-based took over the management of Kesc. It announced to invest 350 or 360 million dollars in the power utility at that time. Where that money has landed? On remuneration and ostentation? The original problems of load shedding are still there rather galore. Why 200,000 kundas (hooks on life-threatening floating wires) have not been removed and why 20 to 25 percent T&D losses have not dropped to by-default 10 to 12 percent so far in over 365 days. Revamping of distribution networks of four towns was to be completed by now. However, Kesc is passing lame excuses of not meeting its commitment. Management is shy of responding to queries by media.
Total existing net capacity of Kesc's five power plants is 1507 MW. As name implies, net capacity is transmittable outputs of electricity. The company confirmed in news reports that it was taking 600 MW from WAPDA. Supply of 240 MW from two IPPs is discontinued for a while and KANUPP's 80 to 90 MW is not on regular basis, even though, a conservative estimate of total current available electricity must not be below than 2107 MW. Dr. Qazi puts it around 2325 MW since he argues de-rated capacity of Kesc, which according to an official document of Nepra is 1625 MW, should be an actual supply from company's own power plants. WAPDA supply is 700 MW, he says. If transmission and distribution losses of 150 to 200 MW are subtracted from the total, the count is still no less than 2125 MW. Nepra has approved a request by the Kesc of modification in its existing generation license due to decommissioning of its 66 MW unit of Korangi Thermal Power Station, recovery of lost capacity, and addition of 220 MW combined cycle power plant. Under the modified status, de-rated capacity stands at 1735 MW and net capacity at 1603 MW. According to Kesc, there is an existing demand of 2,250MW in the city.
In a plea filed against performance of Karachi electric supply company in Sindh High Court, it was revealed that the company is in blatant violation of Nepra's performance standards (distribution) rules, 2005. These violations are related to distributions and perpetrated also by Wapda's supervised Discos. According to these rules, applied on all distribution companies, there must be no more than 60 unplanned power supply interruptions in a year; there must be no more than 88 hours of unplanned power supply interruptions in a year; and there must be no more than 16 planned power supply interruptions in a year. Law Foundation, Sindh High Court Bar Association, Helpline Trust, Shehri, and 13 others filed the constitutional petition against Nepra and Kesc.