KESC offers experiences to other energy companies

ISLAMABAD - Amid unannounced blackouts coupled with burgeoning losses being faced by the country’s power sector, first privatised power sector entity - Karachi Electric Supply Company (KESC) - has offered to share its success model with all power firms to improve performance.
The company’s Chief Executive Officer Syed Nayyer Hussain made this offer during a meeting between the KESC team and a press mission of Asian Development Bank (ADB), which is a shareholder in the utility. He said that the KESC being the first private power entity has introduced certain structural reforms coupled with certain drastic changes to improve the efficiency in performance.  “The KESC has increased recovery of dues and reduced line losses significantly while it is now ready to share its success model with other power distribution companies,” said CEO KESC, adding, “At present the KESC has become role model and is providing leadership to the entire power sector, as many of its innovative interventions have been acknowledged by various responsible forum as best practices in the power sector.”
He also said that as the government was unable to honour to its commitments especially regarding the provision of gas, so how would other private investors participate in the proposed privatisation of the incumbent government. Though the KESC has sufficient power to supply to its consumers yet it is resorting to load shedding as a strategic policy only to reduce the line losses and improve recoveries.
“The government owed Rs63.6 billion to KESC including Rs37.8 billion worth of TDCs and Rs25.8 billion of KWSB, which is 43.6pc of the total receivables held by KESC,” said Chief Executive Officer Syed Nayyer Hussain. Raising serious concerns over the failure of federal government towards honouring the sovereign commitments, which it had given to the Abraaj Group, the Dubai-based firm that manages Karachi Electricity Supply Company, the KESC management has said that it might hamper the future plan of PML-N government to privatise the power distributing and generating companies.
The management also briefed the press mission of ADB in details about the affairs of KESC. They were of the view that certain structural issues are lying pending for a long time between the government and the KESC management that required proper mechanism to rid from them through involvement of notables. They said the government had promised to provide 276 million cubic feet per day (MMCFD) gas to the KESC but now it was providing only 80 MMCFD gas, which caused reduced power generation than to the installed capacity. They also said that the KESC, in 2009, had established proper load shedding policy under which 100 percent power supply was ensured to 59 percent power consumers of the private power utility and also to the strategic installations. At present, transmission losses are around 2.5 percent against the 5.0 per cent in 2009 due to introduction of various measures to reduce the losses of the utility. 
“The central government is also reluctant to clear outstanding dues of KWSB besides not ensuring the supplies of gas and delaying the clearance of Tariff Differential Claims (TDCs) despite the fact that the power firm (KESC) had invested $1 billion and increased efficiency by 10 percent along with enhancement of enhances power generation by 1,006 MW. The NTDC is bound to provide 650 megawatts of electricity until 2015,” said one of the team members of KESC management. About the financial position of the country, the KESC management further told the ADB press mission that total receivable of the KESC is Rs 145.98 billion while total liability is Rs 58.82 billion. They said that monthly billing of the KWSB’s is in the range of Rs625 million to Rs650 million. However, the private power firm is clearing the monthly bills of Sui Southern Gas Company SSGC) despite pending amount of billion of Pak rupees.

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