Despite capacity, K-Electric not producing electricity: federal govt

AGP says power utility company owes Rs130.3 billion to different federal government departments

ISLAMABAD: The federal government claimed on Monday that despite privatisation and a dole of Rs269.5 billion, K-Electric had failed to meet energy demands of the country’s largest city.

In a statement filed in the Supreme Court, the federal government further claimed that K-Electric was intentionally and consistently underutilising its own power generators, instead, relying on energy being supplied from the National Transmission and Dispatch Company (NTDC).

In a case filed by K-Electric Limited against the Sindh High Court’s April 14, 2014 order, Attorney General of Pakistan (AGP) Salman Aslam Butt submitted a concise statement in the apex court on behalf of the federal government.

The statement noted how K-Electric's increased dependence on the NTDC had put pressure on the already strained resources of the dispatch company, resulting in increased load shedding throughout the country.

Read: Sindh govt shifting blame to hide its own misgovernance: K-Electric

According to K-Electric's petition, the Karachi Water & Sewerage Board (KWSB) was a major defaulter of electricity charges, owing an approximate Rs28.74 billion to the power utility company.

It added that the KWSB consistently defaults on its monthly bills, which, after recent increases in tariff by the National Power Regularity Authority (NEPRA), amount to Rs600 to Rs700 million per month. As a result, K-Electric had on October 12, 2011, disconnected four o the water supply utility's electricity connections.

Later, the respondent had approached the SHC by relaying an implementation agreement, which was signed between K-Electric and the federal government. According to that agreement, the federal government was bout to pay KW&SB's outstanding dues.

The apex court had on February 19, 2015, summoned secretary finance, secretary water and power and the AGP to explain the non-payment of dues, Rs28.74 billion, by the KWSB to K-Electric.

In response to the court’s order, the federal government says it is not obliged to make payment to K-Electric in respect to KWSB’s outstanding amount, which is Rs28.74 billion.

The federal government argued that it had suffered a financial impact of Rs269-479 billion in order to facilitate K-Electric – an amount to be constituted as additional benefit and not consistent with the underlying financial assumptions of privatisation.

The federal government further added that despite availing financial concessions, Karachi’s power utility company failed to take the necessary steps to make its operations independent of national grids, and only adopted practices which further enabled it to take unfair benefits from the system at the loss of the federal government, national grid and the citizens at large.

Read: Federal govt, K-Electric directly responsible for heat wave deaths: Memon

“K–Electric has presented the issue before the top court in an extremely selective and narrow manner. It is the part of a multifaceted payment chain and has payment obligations toward many government entities. It would not only be misleading but also be opposed to justice if only any single isolated strand of this fairly complex and interconnected matrix of legal and financial obligations was considered separately without appreciating the whole framework.”

The reply further states that K-Electric’s local demand for electricity was on average 2,000 to 2,500MW and as per its own website, K-Electric’s total capacity is of 2,710MW after the deduction of 650MW from NTDC.

“Accordingly, K-Electric has sufficient capacity available in order to meet all of its demands. However, K-Electric continues to rely on electricity from the NTDC. Approximately, 365MW of its generation capacity is stated to be provided by independent power plants.”

The government has also submitted details of Rs130.3 billion to be given by K-Electric to different federal government departments, including Rs55.995 billion to NTDC, Rs55.485 billion to SSGC and Rs3.228 billion to PSO, among others.

K-Electric is not the victim of gross non-payment but is guilty of consistent payment evasion to various entities as it currently owes more than Rs130 billion to the federal entities, adds the government reply.