KARACHI, Aug 14: Two and a half million people, who continued to experience power outages throughout the ongoing summer, have been charged 16 per cent more by the Karachi Electric Supply Company against the general sales tax from June without any notification issued in this regard.
The privatised management of the utility, sources said, took advantage of the government’s decision regarding the withdrawal of subsidies by passing the burden to consumers who were also threatened by another imminent tariff increase by the National Electric Power Regulatory Authority (Nepra).Traders have, meanwhile, threatened the KESC management that they would not pay their utility bills from August if power breakdowns persisted and the utility failed to improve its generation capacity and distribution network.
The general sales tax was reflected in the bills in the past as well but it was adjusted because the government did not pass it to the consumers. However, the company has ‘illegally’ levied 16 per cent general sales tax on residential consumers if they used over 100 units from July.
KESC employees, too, have been sent utility bills accordingly, the sources said, adding that the privatized management was expecting to collect about Rs3 billion under this head.
Earlier, Al Abaraj of the UAE, who recently assumed command of the power utility, increased the GST on industrial consumers by one per cent to make it 16 per cent and withheld 10 per cent tax on the KESC clients on behalf of the government. The tax withheld is collected from industrial consumers, whose power dues exceed Rs20, 000 a month. The KESC operators had included this in the bills of June. However, industrialists protested over the move saying that it would cause “further closure of small and medium size business.”
Meanwhile, there are reports that utility managers have yet to decide about the rental power provider. Sources said that Dubai-based Ms Agrico and Pakistan-based Progas were the major companies under consideration.
The Dubai-based rental power provider is offering 50MW on certain conditions, including advance payment and tax exemption on import of equipment. Besides, the rental power provider is asking the KESC to open an LC on its behalf. The firm, which promises to start supplying 50 megawatts to the KESC three to four months after signing the deal, will charge 5.5 cents for a unit.
The Pakistan-based Progas has offered to provide 83 megawatts on a rate of 3.5 cent per unit. The firm is asking for some relief on the import duty. It will be able to start providing 83MW within about six months.
Korangi Gas Turbine,West Wharf and Haroonabad facility have been identified for the installation of power plants.
Outages continue
On the Independence Day, the KESC’s Unit 5 of the Bin Qasim Power Plant became non-operational and the utility resorted to load shedding to the tune of 200MW, sources said.
There was no official word on the power situation but sources said the utility wad cutting on fuel cost, especially after receiving a notice from the Sui Southern Gas Company (SSGC) and Water and Power Development Authority (Wapda) to sign a new contract for bulk supply of gas and electricity.
It is worth noting that the Unit 6 has not been functioning since Aug 13 and only four units are operating on a reduced capacity owing to low pressure caused by the use of gas.
As the KESC has not resolved its dues with the PSO, it rotationally closes one unit of the plant to save on fuel, at the cost of consumer’s convenience.
All the units of the BQPS can either operate on gas or oil. Gas being a cheaper source is the mainstay. But a lack of proper repairs and maintenance in the past had affected the operational capacity of the generating units.
The general secretary of the People’s Workers Union of the KESC, Lateef Mughal, has urged the government to take steps to address the issue.
He also demanded that the utility should not be allowed to be passed on into the hands of unprofessional mangers and the government must act to appoint an administrator to save this strategic national utility.
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