Chief Executive Officer (CEO) K-Electric Tayyab Tareen while briefing the Public Accounts Committee (PAC) of the Parliament which met under the chairmanship of Syed Khursheed Ahmad Shah has said that K-Electric has planned to invest Rs335 billion by 2023 in power production and distribution sectors of Karachi.
The CEO K-Electric said the company has made more investment than its commitment which helped improve generation, transmission and distribution networks.
The official informed the panel the government has not provided security clearance to Shanghai Electric as yet, which wants to invest $9 billion in the company. They said that the security clearance certificate was to be issued to Shanghai Electric by the Privatization Commission of Pakistan.
While discussing line and distribution losses on the network of the company, the panel was informed by the officials that K-Electric’s line losses are 21 percent which, as compared with the countrywide power lines losses, are 5 percent greater. The K-Electric officials said that the hook system has yet not been eliminated from Karachi, while still there are certain areas in the city wherein no bills are paid to the company. The company was facing around 8 to 9 percent technical losses, while power theft losses are in the range of 12 to 14 percent.
They said that one percent power losses are equal to Rs2.5billion per annum. The K-Electric officials said that replacing old furnace oil-based power plants of 400MW with liquefied natural gas (LNG) will increase the power generation capacity of the company to 900MW. The company is installing a 660MW coal-based power plant, they added.
The K-Electric officials said the company has not repatriated any amount of profit earned in Pakistan back to home as yet and the entire amount is being spent on improving the utility. They said that as per agreement with the government of Pakistan, there is no specified benchmark of line losses. The panel was informed that National Power Regulatory Authority (NEPRA) had set a limit of 16 percent line losses and has relaxed it for some the power distribution companies, including K-Electric, by 5 percent owing to worse law and order with directions to bring it at par with rest of the power distribution companies by the end of 2016. The officials said, however, the K-Electric has failed to meet the target.
The panel was further informed by the AGP officials that K-Electric didn’t operate power plants on full capacity and got expensive power from Central Power Purchasing Agency (CPPA) and the additional cost is recovered from the poor consumers.
