IS KESC STRAINED BY WORK LOAD?

TARIQ AHMED SAEEDI
(feedback@pgeconomist.com)
May 30 - June 5, 20
11

It is not the first time when people of Karachi are seeking the wisdom behind ill-fated decision of KESC's privatization. Since last three years, the probe has been launched many a times from the public and private forums. At this moment, however, it is setting precedents with infuriated people coming out on the roads in droves to protest against the drawn-out load shedding that spans over three to four days in some places.

Complaints against Karachi electric supply company are piling up. The sources are eclectic. Domestic consumers are cussing out the private power manager as they have to endure humid days without electricity, small, medium and large sized companies are firing broadside at the electricity supplier for its inaptness in managing the energy crisis, and mid and low level employees of the power manager have yet to swallow the bitter pills of attrition that KESC believes will improve its financial health.

Was the transfer of majority shares in KESC to a private concern a right decision? Interestingly, the prime shares of the generation cum distribution company have changed hands at least three times since its first privatization in 2005 without making public aware of the deals. This unawareness makes stakeholders rightly raise questions over the transparency. Had the company not been privatized hit-and-miss, would the situation have been different? The answer is not simple and needs consideration of circumstances nested around the power sector of Karachi.

Pakistan rears one of the dilapidated power sectors in the region. Over the years, the power production has not been reached to its optimal and electricity generation remained below the installed capacity. The country witnessed electricity surplus until 2002 due to favourable international oil prices and spate of investments in the power generation said to be sparked by the 1994 power policy. However, notably no significant investment was recorded in the country transmission and distribution system since 1992, according to a government report. Distribution losses are on the rise and as per the official data complied for the year 2008-09 KESC was amongst the country's three discos (distribution companies) that had highest line losses: KESC (36 per cent), Hesco (34 per cent), Pesco (38 per cent), and Qesco (20 per cent).

The existing power manager in Karachi is said to have experience of running power operation in an African country to its credit. Therefore, experts were expecting turnaround in the power sector. In contrast, the company seems to lose control over the crisis despite having spent much time in understanding the local environment. In fact, the energy crisis is worsening day-by-day unleashing negative social and economic implications.

People in the city and around the suburbs are bearing the brunt of KESC-employees standoff. Disgruntled employees refused to remove the recurring distribution faults and therefore in some areas load shedding continued for three or four days not much because of electricity shortfall but because of go-slow, or linemen's strike.

The hell is at homes and in the stomachs of especially daily wagers and home-based small factories in suburban locations of Landhi, Korangi, Liaquatabad, and New Karachi. These small factories are unsung engines of mainly local textile industry employing a large number of workers engaged in sewing, stitching, dying, over-locking, and various other important textile related jobs. Workers sitting on roadside tea hotels, reading newspapers, and chatterati busy in political bashing in the sweltering afternoon-peak hours of production-are common sights in Landhi town having hundreds of garments and leather home-based factories. Many of them of course cannot afford petrol-run electricity generators to run high-voltage machines. Load shedding is in fact dragging once prosperous class towards poverty. No potable water supply because of load shedding is adding insult to the injury. Political parties seem to be in deep slumber and have shut their eyes to the people's pang.

Electricity tariffs are not coming down owing to continuous rise in the prices of furnace oil. However, the government paper showed that gas share in KESC's own power generation was high. Gas-run power production is relatively cheap. Power theft is a major cause of power crisis. It is observed that genuine payers find themselves pilferers the next morning when they receive inflated bills. While people should be educated, that how their illegal acts are affecting others, yet organized thefts under political clouts should also be stopped immediately. KESC management must have guts to finger point at where actually does the patronage lie for the power thieves. If it has no guts, it should not spoil the curry, which it does not cook.

KESC's daredevil defensive stance is indicating prospects of profits in the presently messy power landscape of the metropolis. Government has no teeth to crack the nuts of massive losses of state run enterprises. Swelling budget deficit can be cited to understand the reason. Last resorts are local and foreign investors that can well turn the crisis around.

For a city like Karachi that is overwhelmed by 18 million population, one distribution company is not enough if at least when the problem lies in distribution. Around 40 per cent power pilferage or line losses are not small; system supply goes beyond 2,000 mark. KESC had two million consumers including domestic, commercial, industrial, agriculture, public lighting, and bulk supply, revealed 2010 data. Its network also expands to neighbouring highlands in Balochistan. It often fails to process the applications of new connections. Over-delayed approval of connections compels the applicants to look towards illegal substitutes of getting electricity, encouraging 'Kunda connections'. Last year, pending applications were recorded at more than staggering 40,000.

It is very logical and timely to divide the distribution authority at towns or at least zone levels. This division can pave the way for much-needed investments in the decrepit power transmission and distribution networks.