The perennially-trapped-in-circular-debt Karachi Electric Supply Company (KESC) has been collecting Television License (TVL) Fee and General Sales Tax (GST) since October 2008, but not a single dime of some Rs 32 billion recovered has been deposited in the national exchequer, Pakistan Today has learnt. A fixed sum of Rs 35 is collected under the head of TVL Fee from each residential consumer in Karachi, sources told Pakistan Today, explaining that with approximately 1.5 million residential consumers, this adds up to approximately Rs 10 billion (Rs 997,000,000 to be precise) when calculated from October 2008.
The KESC also recovers 15 percent GST from every consumer, with revenue under this head totalling Rs 8 billion per month. The company had to deposit Rs 1.2 billion every month from October 2008; when calculated till May 2011, the company has inflicted a loss of over Rs 22 billion to the national exchequer by not depositing this sum. Fuel adjustment surcharge is also charged from consumers, but the KESC does not rely on oil to generate power but on natural gas that is purchased from the Sui Southern Gas Company. On the other hand, KESC’s owes the Pakistan State Oil (PSO) Rs 25 billion, the SSGC some Rs 57 billion, and another Rs 130 billion to WAPDA. The company had procured a loan of Rs 40 billion against a mortgage taken out on KESC property while a loan of Rs 200 billion was secured from the International Monetary Fund (IMF) on the guarantee of the Government of Pakistan.
In terms of subsidies, the KESC received Rs 105 billion from 2008 to 2011from the government. It is pertain to mention here that at the time the power utility was being privatised, then Privatization Commission chief and current finance minister, Hafeez Shaikh, had argued that one of the major reasons to denationalise the company was to get rid of subsidies and improve efficiency.
