KE getting 650 MW electricity without any agreement

Even after a delay of one year and eight months, the government has failed to resolve the issue of the supply of 650 MW to the private sector power distribution company, K-Electric (KE) in the mega city of Karachi.

After warning of strict regulatory action by the National Electric Power Regulatory Authority (NEPRA), earlier this year, the Ministry of Water and Power (MWP) had given a deadline of June 30 to KE for reaching an agreement. However, there is no progress on the issue, an informed source said.

The ministry had asked the KE to submit a viable payment plan for power supply. Previously, the company had linked the payment to gas supplies and unpaid dues of Karachi Water and Sewerage Board (KWSB). The legal contract for power supply ended in January 2015 and since then the MWP has been holding parleys with the KE to resolve the issue.

It is important to mention that the Council of Common Interests had directed the government to limit power supply to KE to 300 MW from 650 MW. However, the decision could not be implemented as MWP entered into marathon talks with the company.

A top official of the MWP said on condition of anonymity, that the issue was lingering due to the lethargy of the NEPRA, which had taken no regulatory action against the KE. “NEPRA only issues statements and has not initiated any regulatory action against the company.”

He said the ministry could not take a tough stance, as in that case the people of Karachi will suffer. Furthermore a bad impression of Pakistan creating troubles for investors would be created which could affect investment in new power projects as well as privatisation of generation and distribution companies.

The source said NEPRA was withholding regulatory action, as it would be against both the KE as well as the MWP, both of which are involved in the illegal sale and purchase of electricity. But any action against the MWP could be declared mala fide by the government.

NEPRA authorities want to avoid a head on collision with the government but at the same time they too want to save their own skin. If someone approaches the apex court on the issue, NEPRA would be on thin grounds. To avoid that, NEPRA has twice issued policy notes to the ministry to make amends, the source added.