The Karachi Electric Supply Company’s (KESC) is the only private company availing subsidies from the government, managing to get Rs 129 billion from 2008 to 2011 alone.
In 2008, the Abraaj Capital-run KESC management got Rs 24 billion in subsidies, Rs 33 billion in 2009 and Rs 48 billion in 2010. In the six months of 2011, the KESC has managed to get Rs 24 billion in subsidies.
Before the privatisation of the KESC, the government provided Rs 6 billion in yearly subsidies on an average. At the time the power utility was privatised, one of the rationales cited for privatisation was that the government would no longer have to provide subsidies to the KESC and that the power utility would become more efficient and foreign investment would be brought in.
What is also interesting to note is that the share price of the KESC in 2005, when it was under the control of the government, was Rs 15. But now, under private management, shares have dropped to Rs 2.25 – a devaluation of 600 percent.
