Electrifying Karachi

Of all the perennial problems that beset Karachi the matter of who does or does not supply its electricity is one of the more intractable. Assorted solutions have come and gone — the unremembered Turkish power ships — but the supply and distribution of power remains as ramshackle as it has for decades, with power theft no less rampant than it ever has been. Current holder of the poisoned chalice is K-Electric Ltd (KEL) and the Shanghai Electric Power Ltd (SEPL) company has now sought the support of the government in order to accelerate the process of regulatory approvals in order to speed up the completion of a Sale and Purchase Agreement that would see KEL pass into Chinese ownership with the purchase of a majority shareholding. This is not a plug-and–play solution and there are hurdles to jump before this is a done deal. Principal among these is an agreement relating to the Multi-Year Tariff (MYT) that has to be negotiated with the National Electric Power Regulatory Authority (Nepra) but on the plus side the ministry of defence and the ministry of interior have issued no-objection certificates for the sale of a majority of shares to SEPL.

The Privatisation Commission has now referred the matter to the office of the prime minister for the granting of a National Security Clearance Certificate. The prime minister has given his assurances that the deal has the full support of the government and it would be in the best interests of all parties, not least the consumers, to have matters concluded before the dissolution and the formation of the interim government. There are financial liabilities to be settled for one — the dues to be paid to the Petroleum Division are long a bone of contention — and there are divergent views expressed in the summary now on the PM desk. There have already been far too many delays in this crucial deal, and SEPL has given a clear commitment to invest $9 billion in order to expand power generation as well as the supply and distribution network. The future for Karachi electricity is Chinese. Throw the switch. Fast. 

Published in The Express Tribune, March 28^th, 2018.

Like Opinion & Editorial on Facebook, follow @ETOpEd on Twitter to receive all updates on all our daily pieces.