Senate panel seeks greater details on K-Electric’s privatization
A Senate panel on Tuesday sought greater details over Karachi’s major power utility even as it expressed its discontent over the utility’s performance.
This was expressed during a meeting of the Senate Standing Committee on Power held at the Old PIPS Hall, Parliament Lodges on Tuesday. The committee was chaired by Senator Saifullah Abro.
The Senate body was briefed by K-Electric about its privatization process and the profits made thus far.
Imran Qureshi, the Chief Regulatory Affairs Officers of K-Electric told the panel that the company was 109 years old and was nationalized in 1952, just some years after Partition. It was privatized in 2005 and had some 3.4 million customers.
He added that the company earned it’s first profit in 2012.
The first foreign direct investment (FDI) made after its privatization was around $700 million while investment of up to Rs474 billion was made until fiscal year 2022. Most of the funds have gone towards power infrastructure development.
Performance
Qureshi said that KE operates six power plants in and around Karachi which produce a combined power of 1,870 mega watts. This is produced by Korangi Combined Cycle plant, Korangi Gas Turbine, SITE Gas Turbine, Bin Qasim Power Station (BPQS) II, and BPQS III and Port Qasim power station. It meant that most of Karachi’s power is created through gas.
However Senator Abro expressed his dissatisfaction over KE’s performance. He noted that in addition to the power it generates, KE gets an additional 1,100 MW from the national grid, yet it struggles to meet demand.
He also expressed his displeasure over the continuous absence of the Federal Energy (Power Division) Minister Khurram Dastgir and KE’s chief executive officer.
The Committee decided to meet and discuss the matter with the Senate Chairman Sadiq Sanjarani.
Privatization
On the privatization of the utility, officials of the Privatization Commission said that in 1992, the government approved a strategic plan for the commercialization and privatization of the power sector.
They noted that prior to its privatization, K-Electric was making loses for 13 years. The losses for 2001, 2002 and 2003, were Rs16.4 billion, Rs17.7 billion and Rs14.4 billion, respectively.
They further informed that that a process to privatize K-Electric began in 2001. The process was not completed because no suitable buyer came forward. The process was restarted in 2003 and a contract was awarded to a consortium led by Hassan Associates who had bid of Rs1.65 per share.
Senator Abro directed the private commission to provide details of the bidding relating to financial advisor in the next meeting.
Power to Balochistan
Matter pertaining to power provided to Balochistan’s agriculture sector for tube wells was also taken up.
The chair formed a Sub-Committee and appointed Senator Fida Muhammad as it’s convener.
The sub-committee was directed to probe the matter and submit its report within two months.
The committee also discussed the matter of Public Importance raised by Senator Mushtaq Ahmad Khan with respect to recruitment process followed for the different vacant jobs advertised by PESCO.
