ISLAMABAD / KARACHI: The National Transmission and Dispatch Company will continue to provide 650MW of electricity to K-Electric even though their five-year agreement ended at Sunday midnight.

Speaking at a news conference in Islamabad on Sunday, Water and Power Secretary Younas Dagha said the government had not yet decided whether or not to discontinue power supply from the national grid which itself faced serious shortages. “There will be no crisis,” he said.

Responding to a question, he said the government might find a way out of the legal question that would be in the national interest.

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“Whether it is Karachi, Lahore or Islamabad, the government has to take a decision that is good for all.”

When asked if his statement meant the government would not discontinue power supply to K-Electric on Sunday, the secretary said there was no such urgency. He did not say how the power supply to K-Electric would be given legal cover after the agreement expired.

The PML-N ministers have been opposing the 650MW supply to K-Electric after the expiry of the agreement.

Under an amended arrangement, the PPP government allowed K-Electric in 2009 to continue to import 650MW of electricity from the national grid to enable it to develop its own generation capacity.

Its status was also changed from a private entity in the case of power rates to that of a distribution company of Wapda as the NTDC supplied electricity to K-Electric at par with public sector distribution companies.

As the loadshedding in interior of Sindh and three other provinces increased over the years, the house committees of the parliament demanded withdrawal of the facility from K-Electric. During the PPP tenure, the Council of Common Interests decided to withdraw 350MW from K-Electric. But the utility challenged the decision in the Sindh High Court which issued a stay order. The stay has been in place for almost three years.

K-Electric’s chief spokesman Usama Qureshi said the government had not informed his company that it would not extend the agreement. “The federal ministers have been assuring us that the arrangement will be renewed,” he said. Mr Qureshi mentioned meetings with Finance Minister Ishaq Dar, Water and Power Minister Khwaja Asif and Secretary Younas Dagha.

He said the government wanted to insert a couple of new terms in the fresh agreement, but it was told that Karachi could not be run without 650MW supply from the national grid.

He said if electricity supply from the national grid discontinued, loadshedding in Karachi would only create problems for the government.

He said the agreement on 650MW was signed to restrict K-Electric from drawing up to 800MW from the national grid and the then government also wanted to ensure regular payments by the company which it has done by paying around Rs295 billion without any default.

Nepra has imposed a ban prior to K-Electric formally applying for an extension to the agreement, but this was blocked through the restraining interim order of the SHC.

In Karachi, the PPP-led provincial government and the Muttahida Qaumi Movement on Sunday feared a huge economic catastrophe for the country if 650 MW of electricity supply to the country’s commercial capital was discontinued.

Sindh Information Minister Sharjeel Memon warned that any such stoppage of power supply could gravely cripple economic activities in the metropolis and its effects would not remain confined to its own remits.

“The federal government would not be allowed to suspend the 650 MW power supply to KE as it could cripple the economic activities in the city and its effects would be felt all over the country given the fact that Karachi is economic engine of Pakistan,” he told media.

He said power supply to Karachi should continue till an alternative arrangement was agreed upon.

The MQM said that if supply of 650MW to K-Electric was discontinued, the city would plunge into darkness. It urged the federal government to ensure that it did not happen.

The party also criticised K-Electric for not improving its own capacity and solely relied on the supply from the national grid.

Responding to Dawn queries, K-Electric spokesman Ahmed Faraz said the KE’s top management had met federal ministers Khwaja Asif and Abid Sher Ali last week and informed them about the efforts being made by the KE to end the gap between demand and supply of power in Karachi.

He said the KE team urged the ministers not to suspend power supply after expiry of the agreement.

He said the ministers assured that they would inform the prime minister who would take a decision.

The spokesman said some Karachi industrialists had moved the Sindh High Court against the possible suspension of 650MW supply from the national grid and the stay ordered by it was still in force. So the federal government would be committing contempt of court if it suspended power supply to KE, he added.

Published in Dawn January 26th , 2015

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