Pressure on KESC

Since the Karachi Electric Supply Corporation (KESC) was privatised by the Musharraf government in November 2005, nothing has gone right with it. Now, with the country generally in the energy doldrums, KESC has attracted more mischief by firing over 4,000 of its employees. The employees knew what they had to do in a city fast getting out of control of its administrators: they resorted to hooliganism, arson and loot, according to the FIR registered against them by the KESC bosses. However, there seems to be intense pressure on the power company to reinstate all the cashiered staff.

It was downsizing, as the private sector calls its belt-tightening, with a golden handshake scheme offered to those being laid off. But the culture of the inherited KESC staff — based mostly on inefficiency and complacency reinforced by the belief that they could never be fired — was not that found in the private sector. And there were politicians — with PPP in the lead — outside the KESC offices, promising the protesters all the blessings of a totalitarian utopia without regard to how they will pick up the pieces if the party running the privatised utility decided it was time to cut its losses and leave. After the Supreme Court, in its wisdom, undid the privatisation of the Pakistan Steel Mills, the state was not able to run it, reverting to its pattern of appointing corrupt men to it for money-gouging.

The KESC privatisation was opposed by those who insisted that public utilities should not be privatised, much like primary schools, and that since multinational companies (MNCs) who bought them were predatory and ‘profit maximising’, the idea of selling anything, least of all an essential service, should be shunned. Others more ‘political’ in their thinking simply asked the people not to cooperate with the new operator and use ‘kundas’ to steal electricity because it was either too expensive or not being supplied. In June 2009, after there was a prolonged blackout due to rains, voices were raised in the Senate in favour of a government takeover of the KESC. An MQM senator said that “imperial conspiracy attempts are being made to turn Karachi into a non-industrial city”.

We don’t know if Chief Minister Qaim Ali Shah has changed his mind after seeing how debt as high as Rs400 billion has arisen out of the country’s public utilities, but in 2009 he was new enough to his job to lay the blame on those who had privatised the city’s electricity. Most PPP leaders are not aware that Benazir Bhutto had revised her father’s socialist creed of nationalising private enterprises, big and small.

The KESC was privatised by the Musharraf government when Pakistan was not such an attractive place to invest in. The interested party had come in and then tried to run away after grasping the enormity of the challenge of a system that state ownership had allowed to run down. The sale was ‘leveraged’ with friendship. The KESC has tried to explain why its system couldn’t hold up after it was privatised, but no one believes it, and critics keep referring to the halcyon days when it was run by civil servants whose Rs86 billion debt was converted into government equity after privatisation.

KESC is in trouble also because the gas supply to it is being progressively cut. If it reverts to furnace oil, the power rate will spiral to a point where power theft will increase because the utility will have little choice but to increase the tariff. In November 2010, it notified its consumers that its quota of gas of 276 million cubic feet per day had been cut to a mere 100 million. Anyone will find an electricity service impossible to run in Karachi these days. The city has gotten out of control and cannot be classified with megapolises like Mumbai, with their notorious crime underworlds. Karachi is a different kind of city where hardly any business can be plied without paying bhatta to several categories of extortionists. Mumbai loses six per cent of its electricity to theft; Karachi loses far more.

So, in this regard, let us not boast of our outmoded socialist credentials by encouraging popular vandalism at a time when anyone doing business in Pakistan should be patted on the back.

Published in The Express Tribune, January 23^rd,  2011.