KARACHI, Nov 4: The Karachi Electric Supply Company Limited has suffered a pre-tax loss of Rs6.58 billion from July 1 to September 30 as compared to a loss of Rs4.64 billion during the corresponding period of the previous fiscal year.
This has been spelt out in the utility’s financial statements for the current fiscal year’s first quarter.
KESC Chief Executive Officer Naveed Ismail giving a brief overview of the company’s performance claimed that the utility’s own power generation decreased by 5.15 per cent during this year’s first quarter. He attributed that mainly to 12.4 per cent reduction in generation at Bin Qasim power plant. However, he also made a self-contradictory claim that generation losses of Bin Qasim were partly offset due to increased generation at other plants by 7.25 per cent.
He referred to a quarterly report, saying that as a result of the decrease in power supply from Wapda the KESC’s purchases from other power sources increased.
However on the contrary sources said that Kanupp remained out of action for weeks together with DHA-Cogen while the KESC curtailed its purchases from the independent power producers and relied heavily on Wapda/Pepco only to pile up liabilities.
The KESC’s performance to reduce transmission and line losses remained very poor as according to the official claims the utility only managed to bring down the losses from 35.61 per cent to 33.60 per cent. Sources said the losses rather swelled to 40 per cent.
Mr Ismail claimed that revenue from the sale of energy went up by 18.7 per cent due to enhancement of average selling rate by 10 per cent from March and 35 per cent on account of tariff increase allowed by Nepra. It is noteworthy that the issue of 35 per cent tariff increase allowed by Nepra is pending before a committee constituted by the government. However, the hike in prices of furnace oil and gas offset the increase in revenue, he added.
While services to consumers remained questionable, the operation and maintenance (O&M) expenses increased by eight per cent mainly due to enhancement in pay and allowances, repair and maintenance cost of generation facilities and transmission and distribution infrastructure, whereas 52 per cent increase in financial and other charges over corresponding period last year is attributable to interest on delayed payments to the Sui Southern Gas Company and increased bank borrowings.
The KESC CEO claimed that pre-tax loss was a result of cumulative impact of the contributing factors mentioned earlier. He said the loss rose to Rs6,588 million in the first quarter of the financial year, marking an increase of 41.74 per cent. The report pointed out that cost of fuel and power purchase, depreciation and financial charges collectively constituted approximately 87 per cent (Rs20,231 million) of the total expenditures (Rs23,295 million) of the company which were by and large beyond the management’s control.
Power projects
The report also referred to a contract awarded for setting up of a 220-megawatt combined cycle power plant at the Korangi Thermal Power Station in January 2007. The utility’s CEO claimed that gas turbine unitsand 2 had already been synchronized with the system and were undergoing various commissioning tests, whereas third and fourth gas turbines of identical generating capacity were likely to be commissioned this month. A steam turbine with a generating capacity of 26.378 megawatts would be made operational by July 2009.
However, the KESC shareholders’ association claimed that four units of the Korangi Thermal Power Station had not been properly designed. Their intake water channel was defective and giving them problem every now and then because of the presence of sand and oil, the general secretary of the association said.
The report also pointed out that a contract for setting up of a power plant at Bin Qasim Power Station to generate 560 megawatts more was awarded in June 2008. The project, likely to be commissioned in 2010-11, comprises three gas turbines of 128.90MW each (ISO capacity) and one steam turbine of 185MW approximately.
But, Chinese contractors were reluctant to commence the work on 560MW project citing fears that the new management might not be able to achieve the target of adding 1000MW, the shareholders association said.
The report claimed that an outdated transmission and distribution infrastructure was inherited by the owners and overloading of both the networks was responsible for high energy losses.
Four GIS grid stations were completed and commissioned during the last three months. Whereas nine 132KV GIS hybrid grid stations were in various stages of completion and would be commissioned in a phased manner by November 17, which would further improve network reliability and capacity of the transmission network, the CEO claimed.
The report also referred to a commitment of the owners for equity injection of Rs6 billion ($100 million) through redeemable preference shares (RPS) by the KES Power (74.1 per cent) and the Government of Pakistan (25.65 per cent).
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