Power trip: K-Electric to submit agreement signed with Chinese firm

SHC wants details of sale of shares in a petition seeking judicial inquiry into KE's 'illegal' affairs


Naeem Sahoutara March 22, 2017
NEPRA sets it at Rs12.07, requires company to invest Rs238b; power utility’s previous rate was Rs15.57. PHOTO: REUTERS

KARACHI: The Sindh High Court (SHC) sought on Tuesday an agreement signed by K-Electric (KE) and a Chinese firm regarding the sale of 66% of the power utility's shares.

A two-judge bench, comprising justices Nadeem Akhtar and Muhammad Faheem Siddiqui, also issued notices to the federal ministry of water and power, National Electric Power Regulatory Authority (Nepra), Shanghai Electric Power Company through the Chinese embassy in Islamabad, the provincial chief secretary, the secretary of the energy department and the directors-general of the National Accountability Bureau and Federal Investigation Agency.

A group of non-profit organisations had approached the court seeking an inquiry into the facts and issues relating to KE through appointment of an independent judicial commission. The petitioners included Karamat Ali, Nazia Fida Hussain, the Pakistan Institute of Labour Education and Research, Urban Resource Centre and others.

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They alleged that the respondents, including the ministry of water and power and Nepra, had utterly failed to investigate the issues like overbilling by the KE management to the tune of Rs62 billion in a few years and unpaid and payable dues of KE with regard to various federal government entities.

They alleged that the authorities had also failed to probe the use of KE's metering or billing system and Nepra's failure to resolve the pending disputes before the transfer of the indirect shareholding and accounts of KE to the Shanghai Electric Company Limited.

The petitioner contended that the authorities had also failed to investigate KE's agreement to sell up to 66.4% of its shares to the Shanghai Electric Power Limited, a company incorporated under the law of China, subject to the terms and conditions signed between the two parties, which had not been disclosed to the general public.

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To support their argument, the petitioner's lawyer Faisal Siddiqui placed on record a January 26, 2017 letter issued by the ministry of water and power to Nepra advising it to take into consideration the matters highlighted in the letter, while setting the new tariff for KE by correcting anomalies in the new tariff and ensure transferring excessive payment recovered by the power utility back to the consumers.

He contended that ministry's letter was responded to by Nepra by denying the allegations made against the power utility and defending its new tariff.

The lawyer alleged that Nepra, being a regulatory authority, was not acting in a proper and prudent manner and was not exercising its functions and powers, as it ought to have taken timely action against KE in order to save consumers from arbitrary and excessive billing.

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The petitioners pleaded that the only solution for a proper inquiry into the illegal affairs of KE and to provide relief to the innocent consumers was the appointment of an independent judicial commission. Therefore, the court was pleaded to order a judicial inquiry into the issues through a serving superior court judge.

After hearing initial arguments, the bench issued notices to the additional attorney-general and advocate-general of Sindh. It also issued a notice to the Chinese firm through the Chinese Embassy in Islamabad.

Meanwhile, the judges directed KE to place on record a copy of the sale and purchase, if any, with the Shanghai Electric Power Company Private Limited. They further directed that the focal persons or authorised representatives of the ministry of water and power, Nepra and KE should appear in person in court on the next date of the hearing on March 28.

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