KESC OUT OF ITS SHELL

TARIQ AHMED SAEEDI
Dec 14 - 20, 2009

Indeed a daring step taken by the newly appointed chief executive of Karachi electric supply company, Tabish Gohar was to confront enraged business community in a recent moot at Karachi chamber of commerce and industry. For some, at least the person summoned the courage to hear patiently the complaints of the people, who are the backbone of the national economy. Now the next step should be reparation.

Attended largely by stakeholders of small and large-scale companies, the moot provided a productive platform to kick start resolution of grievances of both the parties: Kesc and its commercial and industrial consumers. As a good starter to reach a solution, it was told to participants that a 'Khuli Katcheri' would be organized weekly at the chamber to redress the complaints then and there.

The complaints are numerous and to some extent based on logical grounds. In any case, it is unethical on the part of the company to send inflated bills to consumers for making up for losses. He conceded that genuine payers were enduring hardships at the altar of defaulters. This has been a frequent complaint about which the company remained silent.

'I do not have money,' said Kesc's chief bluntly while speaking to participants. 'When I do not have money how can I buy fuel?' He said the list of payments' defaulters was long. Different government departments owe billion of rupees to the company, he said and adding this was a main cause of operational inefficiency.

Outlining the break-up, he said Karachi water and sewerage board owed the company Rs8.7 billion, towns had to pay Rs2.6 billion, police did not defray 400 to 450 million rupees, the list went on and on. Alone Public Sector Enterprises could not settle the bill of Rs3 billion. He said the Kesc had to shell out Rs33 billion to SSGC and Wapda.

He said there were 70 Kunda-infested areas. "We can not take action against them as this may cause unrest." He said if we cut the line of defaulters, this would halt water supply, and trigger law and order problem. 'Most of the cases of power theft are recorded in posh areas.' He said in average 35 percent line losses power theft had a share of 21 percent. He said furnace oil price had increased astronomically from Rs4000 per ton 15 years ago to Rs48,000 per ton. He was not content about the rate at which gas was supplied to the company.

His was a good suggestion for energy audit of industrial units to know the gap of supply and consumption. If implemented adequately, this would result in controlling transmission and line losses.

Abdul Majid Haji said in last eighteen months there had been increase of 130 percent in electricity tariffs. He said Kesc must control rise in tariffs, which are increasing the cost of industrial production. Increasing further tariffs is extra surcharge on late payment, he said. He said the electricity faults had not been mended so far causing hiccups in smooth commercial operations in the city that contributes 67 percent revenue to the national exchequers and has 15,000 large and small-scale industrial units. 'Voltage fluctuation is rendering losses to the companies.' More than 90 percent members of KCCI complained of inconstant current.

Chamber's escalator broke down due to the fluctuation, he said. KESC had agreed to set up a help desk at the chamber to redress complaints of members then and there, but the idea was not implemented, he brought into the notice of Kesc's chief.

The moot appeared to be predetermined as amicable so that no speakers could pull the legs of others and if do so then with giving a leeway to other party to save its skin. Otherwise, what was the reason behind discussing operational bottlenecks of the company by a representative of the business community? If a company falls short of its responsibilities for any reason whatsoever, the victim of this indulges in to motivating recurrence of errs by overemphasizing causes of failure. Understandably, KESC is facing abnormal transmission and distribution losses, mainly triggered by power thefts, which have assumed a serious proportion in the corruption-riddled society. Majority of small consumers are not conscious about power theft. They have no inkling of the dark pit they are pushing themselves into by committing power theft. A fact that was candidly illustrated by the Kesc's chief.

All problems aside- there is nothing new to speak of -, what the management has done so far after taking over the helms? Or, what its management is doing to manage the power that what it is supposed to do with the same problems stood right from the day one pre- and post-privatization? What, in fact, electricity consumers, domestic, commercial, and industrial are suffering from altogether is long lasting woes of electricity or by electricity.

In the midst of diffusion of ethical business practices across the world that are vying for more and more market share by giving customers price advantage, what the foreign company has learnt is a question in many minds. There is a suspicion that it has arrived to take a ride of emotionally charged consumers in Karachi, knowing that it would be allowed to repeat the product testing other private stints did in past without singeing its income statement. Expenditures do not take too long to reflect results, which are far from happening.

Unlike other consumer products for which consumers have several substitutes to choose from, electricity is a service supplied by only one company in Karachi. This may become a good assignment for competition commission of Pakistan to test out the legal context of the monopoly of the service supplied to 18 million electricity consumers citywide.