KARACHI 0 By sacking a huge number of 4,000 of its employees, the Karachi Electric Supply Company (KESC) has opened a Pandora’s Box for the government as well as the consumers at a time when the mega city of Karachi is braving a fresh wave of targeted violence.
Thursday’s confrontation between the KESC, its employees and other stakeholders is not a new phenomenon: some cases of similar nature are currently being heard in the Sindh High Court. The forced retrenchment of a large number of the KESC employees in one go, however, has put at stake the livelihood of thousands of people and the survival of their family members.
The KESC, on its part, has forewarned of a blackout in the city in case of a stiff resistance by sacked employees. But things are still at a standstill: the tension between the various stake-holders has mounted to such an extent that even most of the KESC’s serving employees are not attending their offices, fearing a backlash from their sacked colleagues.
The history of the KESC bears witness to the fact that the power utility has been victim to mismanagement, corruption and electricity theft. Five years after privatization, the company is still experiencing the same issues that blighted it before its sell-off; mismanagement, corruption, unprecedented line-losses (including electricity theft), huge salaries/perks of the company’s top brass, and massive load-shedding remain the order of the day.
Put in another way, the company currently running the affairs of the KESC affairs has miserably failed to bring about any improvements. Analysts claim the line-losses of the KESC are in the range of 40 percent; if the company supplies Rs 4.5 billion worth electricity to its consumers in a month, line-losses take away Rs 1.80 billion electricity.
Analysts and sources also claim that around 25 percent line-losses (valuing Rs one billion) in a month are related to power theft, and in most of cases, consumers enjoy the connivance of KESC money-makers. In an irony of sorts, if the KESC eliminates its line-losses – especially those related to theft – it would neither face any financial crisis nor run after the jobs of its workers.
Since privatization in 2005, the company has neither made the required investment to minimize shortfall in power generation nor is it producing power according to its capacity. Against its existing capacity of generating 1500 – 1600 MWs, the company is merely producing 450-500 MW per day.
It is not as if the KESC does not have the capacity to produce electricity: despite owning a number of furnace oil-run plants, the company is totally relying on PEPCO and its gas-fired plants in an attempt to produce cheaper electricity. Some 300 MWs are also bought from from IPPs, rental power producers and KANUPP. The company’s strategic approach of reliance on gas units and PEPCO’s electricity translates into a supply shortfall, which in turn, inconveniences the lives of citizens and the business community alike.
If the KESC was to be run on the decades-old pattern of mismanagement, what was the purpose of handing it over to the private sector? Despite over 100 percent increase in tariff since privatization, why is it that the company is incurring financial losses? As things stand, the KESC’s payable dues to PSO, PEPCO, SSGC and other stakeholders have swelled to around Rs90 billion. On the other hand, the company has not been able to recover Rs 40 billion in outstanding dues from its consumers. The burden of the KESC’s financial losses are in turn placed on consumers, and of course, its employees. Time for a rethink?
