KESC turnaround: A success story we all missed — I

Published: January 4, 2014
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Luck played a role, earning him (Gauhar) a Chevening Scholarship to study at King’s College from where he graduated with a degree in electrical engineering by the end of 1992. PHOTO: EXPRESS

Luck played a role, earning him (Gauhar) a Chevening Scholarship to study at King’s College from where he graduated with a degree in electrical engineering by the end of 1992. PHOTO: EXPRESS

KARACHI: In March 2013, Tabish Gauhar, the 42-year-old Chairman of Karachi Electric Supply Company (KESC), wrote a lengthy article, which was never published in newsprint. So it is hard to judge what could have been the general reaction. However, it surely makes a reporter take a cynical view of him. After all, he called the beat reporter a “frustrated have-not journalist”.

Headlined “Why is Pakistan so ungovernable”, the article is part of a book titled “From the trenches: A real life perspective on real life issues.” It has been compiled by KESC officials to commemorate the utility’s turnaround. Basically, it’s all about Gauhar.

It deals with issues like corruption. It blasts industrialists, landlords and tycoons for maintaining the status quo. It quotes famous Singapore leader Lee Kaun Yew on demerits of democracy and politicians’ lack of understanding of economy. It speaks of big guy’s siphoning off billions and small man’s breaking of traffic signals.

In the end a section on media says: “…beat/staff reporters are a completely different lot – belonging to the have-nots…Any important position holder is taken to task ruthlessly because that’s the only opportunity this poor soul has to turn the tables on the system and the society that hasn’t given him much.”

It might appear he suffers from megalomania but Gauhar is probably the only Pakistani corporate boss who has earned the right to say all that.

The making of the reformer

Born to migrants from India, Gauhar’s first few years were spent in North Nazimabad and Gulshan-e-Iqbal. “I knew what it feels like when your clothes are soaked in sweat and you can’t sleep during power outages. I know how it feels to study with only candles on the table.”

The family moved to Islamabad in 1983 after his father got a job in the World Bank. Gauhar completed his O Levels from Beacon House and A Levels from Frobels in 1989, the same year his father passed away.

Luck, he insists, played a role, earning him a Chevening Scholarship to study at King’s College from where he graduated with a degree in electrical engineering by the end of 1992.

Brother of three sisters, he had to come and support the family, which had by then moved back to Karachi. After a stint of little over a year with Engro, Gauhar heard about Hub Power Company, the single largest independent power producer.

He joined Hubco as Assistant Manager Finance. That was the time when power outages had become endemic.

IPPs were promoted by the Pakistan Peoples Party government to bridge a widening demand-supply gap in mid 1990s. But soon after Pakistan Muslim League-Nawaz came to power, investigations into alleged kickbacks started. Gauhar slipped to the centre of the storm.

Trips to Islamabad and attitude of politicians and bureaucrats towards businesses taught him an important lesson: “Governments can be really stupid at times. They don’t know how to secure foreign investment.”

In retrospect at least, he could also see mistakes in deciding the power policy. “Offering a high return to the first IPP was not wrong. Being first time experience, investors were taking risk. Problem was they couldn’t foresee the fuel price.”

Power plants were allowed to use furnace oil, which was selling at Rs3,000 a ton in the 1990s. It is now priced at around Rs80,000.

He quit Hubco in 1999 and joined AES Corporation. His rise was swift under his boss, Shahzad Qasim, who was President of Europe, CIS and Africa regions at AES and now heads Burj Power.

Gauhar left AES in 2006 and ran his own consultancy for few months before joining Dubai-based Abraaj Capital.

Accidental CEO

No one was ready to believe KESC could end daylong power breakdowns and plug annual financial haemorrhage of Rs15 billion and post a profit within few years when private equity firm Abraaj Capital bought majority stake in the company along with management control in 2008.

KESC had already been in private hands since 2005. It had tried larger than life CEOs but the losses kept mounting, and protests were getting violent. Then in November 2009, Tabish Gauhar took over as CEO. He led the Abraaj team, which identified KESC as a potential investment.

But before the turnaround came in-house cleaning. KESC had over 18,000 employees. The management decided to outsource non-core operations like power-line repair work and forced 7,000 employees to take golden handshake. The result was a revolt.

Hundreds of charged employees, led by politically-backed unions, stormed the company’s new head office located off Sunset Boulevard Road. Those who refused to join the protests were beaten, cars were damaged and burnt, and executives moved under cover of police escorts. Gauhar was fired upon twice.

Abraaj team retaliated. Gauhar led an intense media campaign with press conferences and statements defending the retrenchment. A car destroyed by the mob was placed over the office’s entrance as a sign of protest against official apathy for months. And they prevailed.

But the biggest challenge was yet to come.

Published in The Express Tribune, January 4th, 2014.

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Reader Comments (39)

  • kala_bacha
    Jan 4, 2014 - 12:44AM

    A lesson learned- you can do it, if you have a will power to fight this corrupt and thief’s monopolies.
    Great going Tabish Gauhar – we needs more CEO/Managing leaders like you in and every important civil department’s.

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  • hammad
    Jan 4, 2014 - 12:51AM

    where is the rest of the article.it ended on a cliffhanger..

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  • just_someone
    Jan 4, 2014 - 1:17AM

    I have two uncles who have worked for KESC. The first is an honest man and a engineer professionally. The other is a dishonest man who would speak freely about taking bribes, being politically connected and had a fake engineering degree. Even though the first uncle was much higher placed at the firm than the second, he was much much less rich than the second.
    Both worked at KESC since the 80s.
    I was recently in Karachi and found out that ever since the new management took over, the first uncle has become a GM while the second was fired.
    Maybe this gives you the beauty of private organizations. They want to make money. And there is no better motive to kick out lazy and dishonest employees than making money. Private firms dont care about politics or the color of your skin. The only color they care about is green as in money (i dont really know the colors of the new pakistani currency, sorry!).
    Privatize EVERYTHING before its too late as with Pak Steel. It is currently running at 12% capacity when it needs to run at 70% just to break even.

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  • sweet
    Jan 4, 2014 - 1:21AM

    can’t wait for the next part! seems interesting!

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  • Faju
    Jan 4, 2014 - 4:51AM

    RESPECT Brother!!!

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  • jamshed kharian-pak
    Jan 4, 2014 - 6:27AM

    Good looking young man! good work with beneficial result an excellent ceo very inspirational a Guide

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  • AK
    Jan 4, 2014 - 9:39AM

    I believe most interesting part is yet to be publish. keeping my fingers crossed ….

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  • Rabia A
    Jan 4, 2014 - 10:42AM

    Great story. Can’t wait for the second part! Love itRecommend

  • Ali S
    Jan 4, 2014 - 11:30AM

    Gauhar is the kind of mainstream success story our media or politicians never want to mention. Why? Instead of basking in the glory, he is quick and honest to point out what the problems are – even if that means losing popularity in certain influential segments of society (including the media). Check out this PDF booklet on KESC’s website, it’s very well put together and a great read – includes before and after pics of KESC’s offices that show exactly how much things have changed.

    As a Karachiite who has lived in two different middle-class neighbourhoods (with family in others), I can say that we’re all reasonably satisfied with KESC’s performance. Areas with 80%+ bill collection have zero loadshedding even in the summer (that includes a lot of predominantly middle-class neighbourhoods, and I have personally witnessed this in my old neighbourhood), while areas with 70%+ bill collection (like mine) have 3 hours of timely loadshedding. And despite this, KESC is the only power company in Pakistan that is turning a profit. Meanwhile, some parts of DHA still have 4-6 hours of loadshedding because the waderas who live there think paying bills is ‘below them’.

    KESC’s customer support (whether on the phone or Twitter) is always helpful, to-the-point and refreshingly professional. Privatizing KESC was MQM’s single biggest gift to Karachi. Since cleaning up the govt’s way of doing things is still a few generations away, privatization is the only way forward.

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  • Ali S
    Jan 4, 2014 - 11:57AM

    @hammad:

    Read the title. It says it’s part I of a series.Recommend

  • Maulana Diesel
    Jan 4, 2014 - 12:04PM

    unfortunate. Pakistan needs Statesmen Musharraf and professionals like Tabish.

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  • Masood
    Jan 4, 2014 - 12:18PM

    KECS would be soon in the success stories in Management books. Tabish Gauhar A man of courage and dignity has shows real enthusiasm to rectify all the loopholes of system and make KESC a profitable firm… plus working in KESC has become the dream of true professional guy due to its professional management and pay scale.. but let me tell every one the number of lad shedding going in your area is due to theft.. once it would be finished no more load shedding as in some parts of Karachi..

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  • waqas
    Jan 4, 2014 - 12:23PM

    Wao!!! Interesting.. Waiting for second part

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  • Khalid Rahman
    Jan 4, 2014 - 12:42PM

    Likes of Tabish Gauhar are what Pakistan needs at the head of every organisation.

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  • talpur
    Jan 4, 2014 - 1:55PM

    @Ali S:
    why do u always point fingers on waderas u think only they are the culprits. just a reality check, the company thts operating kesc is owned (has a stake) by a wadera. plz stop this waderas non sense

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  • Jan 4, 2014 - 1:56PM

    And thats why I’m thanking KESC ever since. Thank you for being nice with us – Karachiites..

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  • Ishrat salim
    Jan 4, 2014 - 3:05PM

    Pass on PIA to him…then PSM and so on…….likes of Tabesh Gauher is one of a kind in Pakistan….it need guts, preservance and honest hard work…..a team player which he is.

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  • bash gul
    Jan 4, 2014 - 3:09PM

    He is a great executive. But the bottom line is has he enhanced the capacity of the power supply to Karachiites? He should concentrate of the line losses and kundas now. Without the cannivance of the KESC employees, no one could dare take illegal connections.

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  • Zeenia Shaukat
    Jan 4, 2014 - 3:54PM

    Your elite-minded journos know of no limits. Tabish Gauhar is a success story? Excuse me? Ask Karachiites how the KESC has held them hostage to its whims. It charges even unoccupied apartments despite related applications filed by ppl. If nothing you ppl can learn to read the Letters to the ed section and public complaints about it regularly printed in Dawn.

    They expelled thousands of workers and that is a success story? They charge us thousands unnecessarily and when you ask them they waste our thousands others in running between their office. I know of cases where the KESC has charged one lakh plus rupees without any explanation and then told the consumer the amount will be “adjusted” in future bills. If you know it, that’s called “Forced Loan” and mashallah, KESC is a king of forced many things.

    Maybe ppl living in Surjani town should be asked to do a story on Tabish Gohar and see how it matches the ET’s glowing tribute to TG.

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  • Parvez
    Jan 4, 2014 - 4:13PM

    How can a Karachi resident miss a success story like the KESC turn round……he would have to be blind.
    The same formulae should be used for PIA and Pakistan Steel.

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  • Kash
    Jan 4, 2014 - 4:39PM

    Great Man!

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  • Ovais
    Jan 4, 2014 - 5:14PM

    Privitization is success, PPP stop destroying pakistan

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  • Concerned
    Jan 4, 2014 - 6:36PM

    It is not the states responsibility to run businesses but to regulate them

    I say PRIVATISE EVERYTHING and fix the TAX NET TO COVER ALL.

    Pakistan will be a success

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  • KPK
    Jan 4, 2014 - 6:44PM

    Dude… this is no way to finish a story.

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  • Amin
    Jan 4, 2014 - 7:13PM

    I live in gulshan Iqbal and ever since kesc became private our load shedding has stayed the same and bills gone up 10 fold. Worse still, no real infrastructure improvement seems to have taken place and my neighbourhood has a 90% recover rate. Curse you privatization.

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  • Charlie
    Jan 4, 2014 - 7:52PM

    @Amin You live in Gulshan Iqbal dude :P

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  • Anwar
    Jan 4, 2014 - 10:48PM

    Feel proud to be working for a company defining the meanings of good corporate governance in PakistanRecommend

  • Moiz
    Jan 5, 2014 - 12:09AM

    @Amin I live in Gulshan as well, and ever since privatization our load shedding dropped to nil in the summers. We have three hours of scheduled cuts now in the winters due to power shortages. You might want to review whether your area does actually pay up it’s bills. Most of us here remember the times when power used to disappear for days on end without explanation.

    @Zeenia KESC was always horrendously overstaffed. That is one of the reasons it failed to profit, and failed to function. Eliminating non-essential staff is the way companies move forward. That’s how all companies in the West have industrialized. And certainly in the case of KESC, several of those laid off were non-essential corrupt staff.

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  • SHB
    Jan 5, 2014 - 12:58AM

    @Maulana Diesel:
    You mean to say corrupt Musharraf.
    Whose net worth by his own account at election time was Rs 625 million(62.5 Crore)
    Can a president and army chief get that much in pay over say nine yrs?
    He built his palace next to Islamabad before he was forced to resign.
    I am not including his over seas accounts and properties.
    To me he is as corrupt as other politicians. We just do not know all the facts.If you are not convinced, ask him to release his last fourteen yrs tax returns starting from 1998. That will clear the picture , how honest he is?
    Thanks for reading my response.

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  • FAZ
    Jan 5, 2014 - 7:15AM

    Can anyone tag Abid Sher Ali here? No Noora league comments so far!

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  • Sharmeen Obaid Chinoy
    Jan 5, 2014 - 12:20PM

    What a fantastic story of a man who lead from the front- We need more like him in pakistan & we need to highlight their work to inspire others to walk in their foot steps!

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  • Maulana Diesel
    Jan 5, 2014 - 12:54PM

    @SHB:
    Probably you are happy with the poor state of affairs. Good luck.

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  • Ali Syedain
    Jan 5, 2014 - 6:36PM

    The story has more players than Tabish Gohar, but he clearly worked hard and fearlessly.

    Several years after its privatization, KESC’s shares were bought over by Abraaj Capital, a Dubai based private equity group. Abraaj was put together by Arif Naqvi, a boy from Karachi who made in good in the Middle East (his interests included Cupola and Karachi’s Park Towers). When Abraaj bought over KESC, the international private equity market that had expertise in electricity was snickering at them: “obviously, they could not find anything else; KESC is a minefield.”

    Abraaj had several boys from Karachi working for it and their commitment to a difficult cause has given stellar results. Mr Naqvi (I do not know any of these guys personally) has gone on t make other investments in the city, including Byco (now the biggest refinery in the country). Mr Naqvi also gave a treasure-chest to IBA Karachi, which the latter used to introduce new programs, facilities and a 15(ish) story building at its City Campus.

    Abraaj is behind KESC and has also managed to protect it from top level interference. Goes to show how much talent and commitment is available in this country if given a chance. Privatize Steel Mills, PIA, WAPDA?

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  • SHB
    Jan 5, 2014 - 6:50PM

    @Maulana Diesel:
    Answer my points regarding corruption and tax returns of last fourteen yrs of Mr Musharraf and do not take the wrong exit in your answer, please. Thanks

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  • Sajida
    Jan 5, 2014 - 8:34PM

    @SHB Corruption is not the issue, efforts to improve the system are.

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  • ouch
    Jan 6, 2014 - 9:52PM

    @Ali S: FYI it’s not MQM’s gift to Karachiites… MQM has been pushing for KESC nationalization for a long time now…

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  • Haroon Rashid
    Jan 15, 2014 - 1:47PM

    Icon Tabish Gauhar should essentially chair the regulatory side of utilities particularly water and sewerage.
    More issues, and revenue zero all and everywhere.
    I wish the turn around on nuclear should be in the court of KESC and Mr. Tabish Gauhar to provide a permanent solution for electricity for the nation.
    Suggest if KWSB be taken over by KESC, and tied up with the electric bill payment, with the smart metering for water, and charges be paid.
    The city would be saved from a major chaos.
    Bravo Mr. Gauhar. You are a lion.
    A lion praise.

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  • Meter Reader
    Feb 2, 2014 - 3:03AM

    I am working as a meter reader in K-Electric since 2002 and have seen many phases , ups and downs in the company but now I am proud to be a part of such remarkable team .
    Working environment has totally changed , 90 percent black sheeps are kicked out , and Karachians dont worry about the load shedding our company is working hard to rub off the mistakes made in last few decades , keep in mind the truth and realities , price of everything has hiked so why not electricity bill ?
    we are working on new and low cost power generation projects and it takes time .
    Long Live K-Electric
    Long Live Pakistan

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  • Meter Reader
    Feb 2, 2014 - 3:23AM

    I am not saying that kesc employees can never be involved in providing KUNDAS but you guys should know that another trend has token place in Karachi which is “kunda networks backed by political parties (yes you know that party:P)” they threat kunda removing teams , beat them ………………………

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