KARACHI, March 15: As KESC consumers endured an increasing duration of load-shedding on Friday due to over 500 megawatts shortage of generation, inquiries revealed that the problem is more due to mismanagement and lack of so-called professional expertise that led to dwindling generation and accumulation of outstanding dues worth billions of rupees.

The Bin Qasim power plant’s two units are out of action, as is the Karachi Thermal Power Station. Due to overloading of the system local faults have developed, which were not being attended to by the KESC staff. Such complaints were rampant in Clifton Block 8, DHA Phase II, Kehkashan, Nazimabad, Nagan Chowrangi, Gulshan-i-Iqbal, F.B. Area and North Karachi. Some of the industrialists said they were seriously thinking of relocating to Bangladesh or South-East Asia.

As per the agreement in 2004, the Water and Power Development Authority (Wapda) was charging Rs3.69 per unit for purchase and/or sale of power to the KESC or vice versa. At the time of privatization in 2005, the government adjusted all dues and there was no outstanding amount, sources in the KESC said. On April 6, Wapda went to the National Electric Power Regulatory Authority (Nepra) for charging on a marginal rate to be worked out on a monthly basis, which was varying from Rs6 to Rs6.5 and now has been raised to Rs9.7 for the last month, sources said.

The KESC has not been making regular payments and the dues have piled up to Rs34 billion as per Wapda’s calculations, whereas the KESC says they amount to Rs13 billion. The government of Pakistan had committed that after privatization, the KESC would be paid a subsidy for the rate difference or it would be allowed to pass it on to the consumers.

But the KESC itself is to be blamed for the situation as according to the half-yearly official estimates of the utility for 2007-2008, transmission and distribution (T&D) losses were 31.4 per cent on Dec 31, 2007. The losses were estimated at Rs6.143 billion. One per cent loss is equal to over Rs500 million.

While there has been no let-up in power outages and load-shedding in the city, sources in the KESC blamed the former operations and management (O&M) contractors Siemens for aggravating the present power crisis and accused it of not fulfiling its obligations under the six-year O&M agreement it signed with the privatized management of the utility in Nov, 2005.

But what the present management of the KESC has not explained is why it could not check T&D losses and allowed the dues to accumulate. Surprisingly, Tanzeem Naqvi, who was once the KESC’s chairman and now holds a very senior position, has not been able to do that either.

On June 11, 2002, as president of the Institute of Electrical and Electronics Engineers Pakistan, Mr Naqvi had, while opposing the KESC’s petition for increase in tariff and automatic tariff adjustment, concluded that the increase in tariff and introduction of fuel price indexation factor was not at all justified because of mismanagement and lack of professional experience on part of the KESC’s then military-led management. In a letter he had shown transmission losses at three per cent, H.T. distribution losses at five per cent and L.T. distribution losses at 10 per cent, bringing the technical losses to 18 per cent. He had claimed that on account of theft the utility lost between 21 and 40 per cent. None of the corrective measures are evident, even though he is responsible for billing and other systems.

But the position taken by the utility’s current CEO retired Gen Mohammad Amjad was also not understandable because the management he was representing had not fulfilled its contractual conditions of investing in systems development.

The KESC’s power generation has since saturated and its distribution system has collapsed. Line losses have increased and complaints about the metering system have been on the rise. There has been no sign of a pragmatic action plan for enhancing the KESC’s generation capacity.