KARACHI, Oct 21: The chief executive officer of the Karachi Electric Supply Corporation, Naveed Ismail, has assured the business community that the power bills’ payment will be extended for 10 days from the due date, and there will be no disconnection even if the bills are paid by consumers on the previous rates, says a press release.

Speaking at a meeting with businessmen at the FPCCI offices on Tuesday, he said the KESC had not increased the tariff. Actually the government had withdrawn the subsidies and the power company had passed its impact to the consumers, he added.

The CEO said the KESC had 27-year-old equipment and since 1989 no investment had been made in it by the government. The utility company was earning no profit and in fact was a bankrupt organization, but “We are committed to making investment if the KESC earns profit”.

According to the FPCCI press release, the KESC CEO said the present average of 34 per cent increase was because of the subsidies allotted to the KESC had been cancelled by the government. He said the National Electric Power Regulatory Authority determined the billing tariff and the ministry of water and power decided how much burden should be transferred to the consumers and how much be subsidized by the government.

The chairman of the Alliance of Market Association, Atiq Mir, who also attended the meeting, said the KESC CEO had asked the trade organizations to refrain from agitating over the tariff issue.

“If the consumers stop payment of bills for 15 days, the company will plunge into a deep financial crisis … and it will be hard for the company to control the situation,” the KESC chief said.

He said the minister of water and power would hold a meeting on Oct 22 with businessmen to discuss the tariff issue.

Mr Ismail assured the businessmen that if the government restored the subsidy, the KESC would reduce the power tariff.

Acting president of the FPCCI Muhammad Farooq Dadabhoy said the industry was bearing very high cost. “The cost of electricity for industry in Karachi is nine cent per unit. In comparison, the electricity rate is 3.6 cents per unit in Bangladesh, 2.25 cent per unit in the US, 1.98 in France, 2.10 in Taipei and 4.11 cents in the UK,” he said.

He said the legal and standardized procedure to determine the prices had not been followed. Until the conclusion of dialogue, the prices should not be considered as final.

The business community has raised questions on the electricity tariff and increasing prices in Karachi. They questioned the justification for the abrupt increase in electricity tariff by 70 per cent.

Former FPCCI president Tariq Sayeed said industry representatives would meet the minister of water and power to resolve the issue.

Payment on old tariff

Some industrial associations on understanding with the KESC have started paying their bills at old rates at the KESC Head Office instead of at the banks.

Korangi Association of Trade and Industry Chairman Shaikh Fazl-i-Jalil said KATI had submitted bills worth Rs3.5 million through pay-orders at the KESC office on Tuesday while bills for Rs2 million were paid on Monday 20 at the “old rates”.

He said the KESC CEO had also said that the government had substituted the withdrawal of subsidy with the fuel adjustment surcharge (FAS). He said there was no justification of increasing the FAS when oil prices had fallen sharply in the world market. “The government is trying to make money and there is no transparency in the deal between the new KESC management and the government,” he added.

He said that markets were abuzz with reports that the new management and the government had made a deal to recover the 42 per cent line losses and theft from the consumers.

The chairman of the F. B Area Association of Trade and Industry, Idris Gigi, said that his association had also collected power bills and would pay them at the KESC head office at the old rates.

The chairman of the North Karachi Association of Trade and Industry, Noor Ahmed Khan, also said his association was collecting bills for payment to the KESC at old rates.

The chairman of the Site Association of Industry, Nisar Sheikhani, said he would wait for the outcome of the businessmen’s meeting with the water and power minister, but the industries would not pay the increased bills.

Earlier, the KESC CEO had refused to meet Tajir Action Committee chairman Imran Saeed Baghpati and Karachi chief of the Jamaat-i-Islami Mohammad Hussain Mehnati.