Senate body restrains govt from deal with KE sans parliament nod

ISLAMABAD - Unearthing massive irregularities in past contracts with K-Electric, Sub Committee of Senate Standing Committee on Water and Power on Friday restrained government from renewing any agreement without discussing it in parliament and standing committee.
The 2009 contract with KESC was brutal and anti-consumers, despite having 26 percent of government shares, Karachi Electric did not appeared before the committee despite serving several notices during last five years, former Secretary Water and Power, Shahid Rafi, joint Secretary Saif ullah and Additional Secretary criminally closed their eyes, and facilitated the agreement, causing huge losses to national kitty but which also deprived general public of Karachi from getting electricity, said Senator Nisar, while presenting the report of subcommittee in the Senate Standing Committee meeting.
He said electricity was bought from federal government at cheap rates while it was sold at exorbitant price to public.
Karachi Electric has been getting 700-900 MW electricity from national grid, against the agreement of 600 MW, he said, seeking last year record from the company.
He warned that the debt against K-Electric was piling up fast but the company was only minting profits which could lead to a disaster any time.
K-Electric has to pay Rs.55 billion to NTDC, and around Rs130 billion to other departments, this may lead to a situation, where government would have to pay the liabilities of K-Electric and public might also have to share the burden, he said.
The issue of non-supply to high losses area was also discussed. The members showed their concerns that by cutting off the supply of electricity in high losses areas the consumers who pay regularly also suffer, so the matter should be resolved administratively and the consumers should not be punished for the failure of administration to recover bills from defaulters.
Chairman Senator Zafar Iqbal Jhagra directed to take strict measures to bring down line losses, while observing that in some areas distribution companies ask bribe openly to correct bills.
Interestingly, during the session, National Electric Power Regulatory Authority between the lines submitted that the authority was helpless in front of k-Electric, strengthening the fears that the authority would not take any serious action against the K-Electric for up to 96 hours of load shedding, which added to the death toll in cosmopolitan last month.
K-Electric is a private company, with 26 percent government shares and three government representatives in board of directors, Nepra is regulatory body while it does not have any administrative control, chairman Tariq Sadozai told the meeting. He said that power supply to some areas also remained suspended for 24 to 96 hours during the recent crisis.
He said that KE generated average 1550 MW from its own plants and got 928 MW from independent power producers (IPPs) including 650 MW from national grid station.
He said the demand was around 3000 MW, whereas the generation capacity of the company is around 2478, so the load shedding would have three to four hours to meet the deficit of around 370 MW, but the company failed to provide 2700 MW, he said.
Sadozai told the committee that supply of 650 MW from National Grid System to KE had already expired in January. He said under the last agreement, KE was bound to generate electricity from its own resources and then the government would supply remaining 650 MW, at a rate of Rs.9 per unit.
He said that initially it was decided during agreement that electricity to KE would be provided on marginal rate. However, after revision of contract in 2009, K-electric was brought at par with distribution companies, and the company started receiving electricity from federal government at subsidised and a very nominal rate, which caused financial loss of Rs 31 billion to the government.
Highlighting helplessness of national regulatory body, Brigadier (Retd) Sadozai mentioned legal constraints.
During 2005-09 K-electric received electricity at subsidised rate but even failed to pay the nominal price. He said during 2005-09, K-electric bough electricity worth Rs112 billion from NTDC but paid only Rs40 billion. The difference of Rs66 billion was received from consumers, and when Nepra took action, k-Electric got a stay from a court, he said.
K-electric CEO Tayyab Tareen informed the committee that they were supplying 2600 MW to the consumers. He said that the company made $1.2 billion investment in power generation and distribution system.
He said that as per the policy, the industrial sector has already been exempted from power load-shedding. However, now load- management was also being carried out in industrial areas in order to ensure zero load-shedding during Iftar and Sehari.
On finding jugglery in the figures of Ministry of Water and Power and Nepra, the committee decided to send subcommittee to Karachi to investigate the deaths and the overall electricity crisis.

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