2010 – another year down the drain for KESC with Rs 21b lost

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ISLAMABAD: The Karachi Electric Supply Company (KESC) has incurred an approximate loss of Rs 21 billion during the outgoing calendar year 2010.
Well-informed source in power sector informed Pakistan Today on Tuesday that there was a serious threat of power riots in the largest metropolis of the country during the coming summer, as KESC lacked funds to meet its operational expenses for the year 2011.
According to source, KESC’s approximate revenue during last 12 month was recorded at Rs 104 billion, whereas Company purchased the electricity of Rs 61 billion from Pakistan Electric Power Company (PEPCO), Independent Power Plants (IPPs), Pakistan Steel Mills and Karachi Nuclear Power Plant (KANUPP) during the said period.
KESC purchased fuel of approximately worth Rs 38 billion for thermal power from Sui Southern Gas Company (SSGC) and the Pakistan State Oil (PSO), while Company paid the financial charges of worth Rs 7 billion, spent Rs 9 billion on the staff administration and Rs 10 billion were spent on the maintenance of its plants and system during the calendar year 2010.
“Except of staff administrative expenses where there is some room for austerity, all the rest are compulsory expenses but the power company does not have the capacity to meet all those,” an official of KESC said on condition of anonymity.
The official said that KESC had already curtailed its oil bill as the PSO refused to supply the oil on credit basis, adding, PSO supplies fuel on the basis of hard cash to the cash strapped KESC. As a result, the official said, KESC was forced to purchase the furnace oil far lesser than its requirement and generated far lesser power than its actual capacity.
“Next summer situation would be more complex and the demand during peak hours particularly in evening, would further increase, while KESC would not have enough resources to produce the required energy due to increasing gap between the revenue and the expenses” he added.
The Sui Southern Gas Company, which supplied gas to KESC on credit is no more inclined to resume the supplies on credit and would demand cash. As a result, KESC would have to further curtail its generation, the source said.
Chronic power pilferage.However, documents available with Pakistan Today reveal that KESC has failed to control ‘Kunda’ System as well as Transmission & Distribution (T&D) losses because of the average T&D losses including power theft was recorded up to 39.4% during Fiscal Year (FY) 2009-10.
KESC has been facing loss of Rs 52.35 billion per annum in state of Transmission & Distribution losses including technical and power theft losses in Karachi region.
65 “kunda Infested” localities were found in Karachi particularly in political influenced areas including Malir, Landhi, Nazimabad, Gadap and areas located in interior Sindh. 59.48 percent T&D losses were recorded in Orangi, 56.56 percent in Korangi, 54.83 percent in Landhi, 53.94 percent in Baldia Town, 53.69 percent in Liaquatabad, 50.60 percent in Malir, 50.33 percent in Nazimabad, 49.46 percent in North Karachi, 48.77 percent in Gadap, 43.32 percent in Layari, 35.31 percent in North Nazimabad, 34.75 percent in Shah Faisal, 33.99 percent in F.B. Area, 28.41 percent in Johar, 27.59 percent in Bahadurabad, 26.44 percent in Gulshan-e-Iqbal, 23.68 percent in area of Tipu Sultan Road, 23.14 percent in Clifton, 18.21 percent in Saddar Area during FY 2009-10.
The document further revealed that accumulated receivables of KESC stood up to Rs 81.3 billion out of which Rs. 34.1 billion is receivable from federal government under the head of subsidy, Rs.15.2 billion from Sindh government entities including City District Government Karachi (CDGK) and Karachi Water & Sewerage Board (KWSB), while amount of Rs 32 billion is receivable by general public power consumers under the head of electricity billing.