Smelling a rat in proposed lucrative deal between water and power ministry and Karachi Electric Supply Company over withdrawal of 350MW electricity, the National Electric Power Regulatory Authority while terming it illegal has declined to approve it and further instructed the private entity to start power generation from its idle units prior to new elected government in the country.

Advising the Karachi Electric Supply Company (KESC) to begin power generation from its inactive units prior to new elected government, Nepra on January 1, 2013 had declared the proposed lucrative deal between ministry and private entity as against the law of land and also rejected to approve the ‘controversial’ proposed deal which is being initiated over withdrawal of 350MW electricity from the private company after a decision of Council of Common Interest (CCI).

Viewing no other option after the decision of CCI to get back 350MW electricity from the KESC in a bid to supply electricity to Punjab province, Power Ministry ostensibly to benefit the private company decided to strike a lucrative deal under which billions rupees worth furnace oil and subsidy would be provided to company. So far, KESC is found not ready to surrender 350MW electricity to the system of NTDC at any cost despite a decision taken by a high forum of the country.  It is only because the NTDC is selling per unit of electric power to company at a cost of Rs9 and, in case of withdrawal of 350MW of that electricity, the KESC will have to fulfil this deficiency at a cost of Rs18/kwh by starting its own idle units to meet the demands of Karachities.

The KESC management during a hearing held on January 1, 2013 told KESC that power ministry had prepared an agreement containing incentives similar to 2009 agreement, which is going to be done in couple of days between the ministry and the company.  Under the proposed agreement, the NTDC would provide 2,000 metric tons of furnace oil for Bin Qasim power plant and to meet the said purpose Finance Ministry would provide Rs4.5 billion in advance. And, provision of furnace oil and payments would be the responsibilities of NTDC. More, the KESC will not bear any such responsibilities and, the Ministry of Finance, however, will be responsible for ensuring subsidy for the KESC in the first week of every month to materialise deal in true sense.

During the course of this hearing held with the advent of New Year, Member Punjab Khawaja Mohammad Naeem while declaring the government deal inked in 2009 with KESC as unlawful had pronounced that the regulator (NEPRA) would not approve this proposed deal at any cost even if the government goes with this agreement containing incentives of billion of rupees over withdrawal of 350MW electricity by the KESC.

In 2009, the power ministry while setting aside the law of the land accorded an agreement with the KESC and extended 650MWs electricity at subsidised rates to the KESC. However, the company closed its power plants having capacity to generate 700MW electricity as its (KESC) power plants remained idle for a long time.

Instructing KESC management to look beyond today (present political situation), as there would be a new government, Member Balochistan Haroon Rashid said, “We are here to protect the rights of electric power consumers of the country.” He added that the KESC should look beyond today and put the things in right frame, as no one knows what would be happened right after three months when there will be a new government in the country, and also asked the KESC to generate electricity as per capacity it possesses. The KESC should think on it that what is going in and on in the country especially in Faisalabad as all provinces are exploiting the situation even if Karachities were sure about 24 hours electricity then they would definitely pay their monthly electricity bills to the company (KESC), he also said.

Acting Chairman Nepra Habibullah Khilji asked the KESC management to make the idle power plants operational and generate electricity as per capacity it has because it can generate electric power in accordance to its capacity. The KESC official present on the occasion was of the view that if the KESC generates electricity in accordance to its power unit’s capacity then the KESC will be closed within two months and there will be a law and order situation in Karachi. He also said if the power plants are fully operated, then the power tariff will go up by Rs 3 per unit. However, the KESC is working very hard on different projects to generate electricity through coal and biogas resources.