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KESC opens Pandora’s Box for government and consumers

http://pakistantoday.com.pk/

By: Javed Mahmood | Published: January 22, 2011

KARACHI 0 By sacking a huge number of 4,000 of its employees, the Karachi Electric Supply Company (KESC) has
opened a Pandora’s Box for the government as well as the consumers at a time when the mega city of Karachi is braving a
fresh wave of targeted violence.
Thursday’s confrontation between the KESC, its employees and other stakeholders is not a new phenomenon: some cases
of similar nature are currently being heard in the Sindh High Court. The forced retrenchment of a large number of the KESC
employees in one go, however, has put at stake the livelihood of thousands of people and the survival of their family
members. 
The KESC, on its part, has forewarned of a blackout in the city in case of a stiff resistance by sacked employees. But things
are still at a standstill: the tension between the various stake-holders has mounted to such an extent that even most of the
KESC’s serving employees are not attending their offices, fearing a backlash from their sacked colleagues.
The history of the KESC bears witness to the fact that the power utility has been victim to mismanagement, corruption and
electricity theft. Five years after privatization, the company is still experiencing the same issues that blighted it before its
sell-off; mismanagement, corruption, unprecedented line-losses (including electricity theft), huge salaries/perks of the
company’s top brass, and massive load-shedding remain the order of the day.
Put in another way, the company currently running the affairs of the KESC affairs has miserably failed to bring about any
improvements. Analysts claim the line-losses of the KESC are in the range of 40 percent; if the company supplies Rs 4.5
billion worth electricity to its consumers in a month, line-losses take away Rs 1.80 billion electricity.
Analysts and sources also claim that around 25 percent line-losses (valuing Rs one billion) in a month are related to power
theft, and in most of cases, consumers enjoy the connivance of KESC money-makers. In an irony of sorts, if the KESC
eliminates its line-losses – especially those related to theft – it would neither face any financial crisis nor run after the jobs of
its workers.
Since privatization in 2005, the company has neither made the required investment to minimize shortfall in power generation
nor is it producing power according to its capacity. Against its existing capacity of generating 1500 - 1600 MWs, the
company is merely producing 450-500 MW per day. 
It is not as if the KESC does not have the capacity to produce electricity: despite owning a number of furnace oil-run plants,
the company is totally relying on PEPCO and its gas-fired plants in an attempt to produce cheaper electricity. Some 300
MWs are also bought from from IPPs, rental power producers and KANUPP. The company’s strategic approach of reliance
on gas units and PEPCO’s electricity translates into a supply shortfall, which in turn, inconveniences the lives of citizens and
the business community alike.
If the KESC was to be run on the decades-old pattern of mismanagement, what was the purpose of handing it over to the
private sector? Despite over 100 percent increase in tariff since privatization, why is it that the company is incurring financial
losses? As things stand, the KESC’s payable dues to PSO, PEPCO, SSGC and other stakeholders have swelled to around
Rs90 billion. On the other hand, the company has not been able to recover Rs 40 billion in outstanding dues from its

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consumers. The burden of the KESC’s financial losses are in turn placed on consumers, and of course, its employees. Time
for a rethink?

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Labour bodies call for KESC’s renationalisation

 
By our correspondent
Thursday, January 27, 2011
http://www.thenews.com.pk/Default.aspx

Leaders of labour organisations in the Karachi Electric Supply Company (KESC) has demanded undoing the privatisation of
the power utility and said that a decision by the government in this regard would be in the interest of people of Karachi and
employees of the public utility organisation.

Speaking at a press conference at the Karachi Press Club (KPC) on Wednesday, representatives of the KESC workers also
demanded that FIRs registered against labour leaders of the power utility should be withdrawn as these were lodged on
false grounds. They also demanded that services of dismissed 294 officers of the KESC should also be restored at once.

They said that KESC should produce electricity using its own resources in order to end power load shedding in the city
whereby inflated billing to consumers would also be stopped. 

They said the KESC had been serving 2.3 million consumers in the city and according to the utility standards prevailing in
the South Asian and adjoining region, the KESC needed 37,000 employees. They said that at present, in the KESC there
were 11,000 workers while 6,000 to 7,000 people worked in the organisation through third party contractors. Moreover,
1,000 officers recruited in the organisation also perform their duties as workmen. 

So according to the regional standards, the KESC is obviously understaffed and not overstaffed and needs absolutely no
downsizing, they added. 

They said that commitments announced on the occasion of privatisation of KESC regarding investment and consumer-end
tariff had not been honoured by management of the privatised KESC. They said that in such an unpromising situation, the
affairs of the power utility had been deteriorating day by day and had been affecting its functioning and services related to
consumers. 

They said that at present the KESC had been producing merely 38 per cent electricity on its own while the remaining 62 per
cent power was drawn from the Wapda and other power generating organisations. The KESC, they said, produced a much
lower ratio of electricity through furnace oil owing to the high price of the fuel.

They said the KESC collected Rs9 billion every month on account of billing from consumers but on the other side the KESC
didn’t pay its vendor organisations including Wapda, the SSGC, and the PSO. 

They also alleged that the management of the privatised KESC had also failed to control transmission and distribution

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losses of the utility causing immense financial losses to the organisation. The KESC labour leaders also informed newsmen
that during the last one year, 18 workers of the KESC had lost their lives while performing their duties providing electricity
services to public and little was done to take care of the interests of the bereaved families.

Those who addressed the press conference were Chairman of KESC Labour Union (CBA) Muhammad Ikhlaq Khan,
General-Secretary of Peoples Workers’ Union Lateef Mughal, and Chairman of KESUTY Arbab Asad. 

They also clarified that on January 20, 2011, by the time they reached the site of KESC head office in Gizri to stage the
protest sit-in, the damage and violence had already been done there and that was carried out on behest of the KESC
management to defame KESC workers and their leaders. They said the protesting workers staged a completely peaceful
and non-violent sit-in outside the KESC head office that lasted for 85 hours during which not a single stone was hurled by
the protestors. 

Meanwhile, the KESC announced that it disconnected electricity supply five police establishments and office but later
reconnected it on the assurance of the police department for payment of their dues. These police establishments included
Garden Police offices, Sir Syed Police Station, Jamshed Police Station, Anti-Car Lifting Cell, and North Karachi Police
Station.

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KARACHI, October 7: The Karachi Electric Supply Company has disconnected electricity supply to several major public
sector consumers on non-payment of bills while some had cleared outstanding amount and the supply was restored.

While addressing a media briefing here on Wednesday, Mr. Jan Abbas Zaidi, Chief Operating Officer Distribution, also said
that the Revenue Protection Department of the KESC had unearthed about 8,000 cases of illegal use of electricity and
action was in progress against the persons involved, including registering of FIRs and recovery of electricity price through
police raids. At the same time, commercial and public sector projects like banks, fuel stations and marriage halls had been
brought under special focus and their actual consumption was being monitored as against their billed units.

Due to non-payment of outstanding bills, he said, after the issuance of final disconnection notices, the power supply to
Askari Park, Auqaf Department, Central Board of Revenue, Education Department, Director Agriculture, Pakistan PWD and
Sindh PWD had been disconnected and the payment was still awaited from these consumers. At the same time, Collector of
Customs had promised to pay next month, Health Department had made part payment, Karachi University paid before any
action was taken, Karachi Port Trust had been making arrangements for payment, Pakistan National Shipping had cleared
all dues, Pakistan Post Office had made part payment, and Pakistan Steel had paid the same day of disconnection and its
supply had been restored.

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In reply to a question, Mr. Zaidi said that a total of four power connections of the Pakistan Steel had been disconnected on
October 3, but the PSM promised to pay Rs. 100 million against a total of Rs. 133 million, and the supply was restored the
same evening. The amount was received on October 5, while the remaining 33 million rupees had been included in its
current bill. He said that the PSM had in fact demonstrated a remarkable response over the issue.

In response to another question, he informed media persons that negotiations were still in progress with Karachi Water and
Sewerage Board over the outstanding amount of Rs. 8.2 billion. While the Board has paid Rs. 50 million on October 1,
which was 20 per cent of its current month’s bill, it had been working out its options and the media would be informed as
soon as any positive development took place in this regard.

On the other hand, he said, under the “Speak-Up” campaign, the KESC had received overwhelming participation from the
general public and over 7,000 persons had called to report electricity theft in various areas of the City. All these clues had
been investigated, some were proved incorrect, but the hit rate had been about 80 per cent which could be called a great
success. The Revenue Protection Department had traced a big number of cases of power theft through its own sources and
finally had collected solid evidence against 8,000 illegal users of electricity, whose method ranged from direct unauthorized
connection to by-passing of meter and tampering with cables. As many as 12 police cases of electricity theft had been
registered in Gulshan-e-Iqbal alone. Total amount recovered from the illegal power users through police raids in that area
approximated Rs. 1.4 million, he added.

He further stated that six pole mounted transformers had been disconnected in Gadap area because the electricity supply
from these PMTs had been misused through ‘kundas’. Supply to ‘MICASA’, a multi-storey building having 500 flats and 300
shops at Sir Shah Suleman Road, Block No. 12, Gulshan-e-Iqbal, had been disconnected because the whole project had
been using kundas. A total of Rs. 4 million recovery bill was imposed of which Rs. 0.5 million had been recovered and the
process was under negotiations. Similarly, another multi-storey building in Block 13-E Gulshan-e-Iqbal, called M/S Hina,
was found using power illegally. The unauthorized connection had been cut and an FIR had been lodged on October 1. The
approximate theft amount of this project totaled over Rs. 0.6 million. Major theft cases detected during the previous couple
of days included Noor Cold Storage in New Sabzi Mandi, Super Highway; ABS Co. Ice Factory opposite KDA Pumping
Station Gharo, and Zaheer Ali in New Town.

Also, electricity supply to Indus Complex in Sohrab Goth behind Al-Asif Square comprising of 310 flats had been
disconnected on September 29 for non-payment of over Rs. 9 million rupees, Shah Latif Town situated in Sector 20-C, Main
National Highway for non-payment of Rs. 34,2000, while the meter of Tooso Restaurant in Bahadurabad had been found
non-functional and this consumer had paid Rs. 3,00,000 on account of that.

Mr. Zaidi further said that special focus had been maintained to monitor projects like banks, marriage halls and fuel stations.
Supply to non-payers had been disconnected. Those on ‘kundas’ had been issued estimates against which payments had
also been received. Cases of those who had applied for new connections were being considered on priority basis. Those
premises which had been using more than one meter were under process of load consolidation to stop misuse of system
capacity and tariff. Special teams of Revenue Protection Department had been visiting commercial premises and
conducting surveys.

Giving out operational update, Mr. Zaidi said on Wednesday afternoon, the total demand of the City stood at 2175
megawatts while the KESC had been supplying 2088 MWs. Wapda was providing 600 MWs and the IPPs were collecting
providing 253 MWs. In reply to a question, he said that DHA-Cogen had started its test operation and hopefully this project
would soon be supplying electricity on regular basis. Mr. Zahid Chaudhry, Head of Supply Chain, and Ms. Ayesha Eirabie,
Director Corporate Communications were also present in the briefing.
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KARACHI, Nov. 21: The Karachi Electric Supply Company has expressed confidence over the support of its 1.4 million
good consumers who pay their bills on time and majority of them do not get involved in illegal use of electricity. A Press
Release issued on Saturday said the KESC has qualified these consumers as the actual strength and pillars of the
Company.

The Release rebutted the impression being created in a section of media to the effect that KESC had been running “a
campaign which describes all electricity consumers as power thieves.” This was a baseless and counter-productive
impression, the Release said, adding, the clarification that of around 2,000,000 consumers, about 600,000 do not pay their
bills on time,  while the number of paying consumers, and the citizens who supported KESC in its anti-theft campaign, was
much bigger, quite overwhelming and extremely encouraging. The KESC had also introduced a “star bill” for good
consumers as a small token of appreciation.

The Release further said that the wrong impression had apparently been created to malign the utility’s good consumers on
one hand and protecting the thieves on the other. The KESC, the Release further said, had already been receiving very
good response from the genuine consumers who had pointed out the incidents of theft in their surroundings and had
informed the utility of the persons involved, under the campaign called “Speak-Up.” The hit rate over theft complaints from
general public had been over 50 per cent, as the statistics clearly showed. During the month of July this year, the Revenue
Protection Department inspected 5001 places on the complaints of common citizens, and detected 2,760 cases of power
theft; in August 2,986 cases had been detected of the 5,056 inspections; in September 1,800 detections against 3,336
inspections; in October 2,813 detections against 6,949 inspections; and, 1,455 detections from 3,871 inspections during the
20 days of November.

Also, it was because of the support from good consumers that the KESC had been able to detect numerous cases of direct
power theft by persons from different sections of society under its campaign “Name & Shame;” numerous incidents of
arrests and police cases had already been reported to the media. The utility had also identified 69 pockets (infested areas)
all over the City, where whole populations are using electricity illegally. KESC has initiated the project to regularize these
areas by improving the infrastructure and safety conditions as well as getting recoveries from their inhabitants in respect of
the electricity consumption. Approximately 50,000 new connections will be provided through this project, with main focus on
Orangi, Baldia, SITE, Korangi, Lines Area, Malir, Gadap, PIB Colony and Surjani.

These campaigns clearly demonstrated the KESC’s on-going solid action against electricity theft on one hand, and of the
popular support that its campaigns had been receiving from law-abiding and good consumers on the other. Under these
circumstances, the Release said, the negative impression being created in a section of media would not have any impact.
Rather, it would expose those elements who had probably been trying to block KESC’s efforts to bring an end to load-
shedding.

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While referring to the pointless debate over the difference between “technical and non-technical losses” that the KESC had
been facing, the Release said that a significant portion of new investment by the existing management of KESC had been
made into the improvement of its infrastructure, which was meant to reduce technical losses. However, power theft and non-
payment of outstanding bills had been two major sufferings that had to be cured in any case, to rid the citizens of powerless
hours. Therefore, both losses, technical and non-technical, were playing equally strong role in causing electricity shortfall,
according to the Release.

The Release added that in spite of all odds and the negative propaganda, the KESC had been working to achieve its
cherished goal of providing non-stop electricity to the Metropolis. “This is our Azm and we are confident that we shall reach
there, by the Grace of God and with the active support of our valuable and cooperative consumers,” the Release concluded.
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KESC is an integrated power utility with exclusive franchise rights to serve Karachi and its surrounding areas, with a
licensed network area spanning 6,000 square kilometres.

GENERATION TRANSMISSION DISTRIBUTION

Capacity: Capacity: Capacity:

KESC 59 grid stations & 123 power transformers 11 KV Feeders                  
1107 Nos
Available Capacity: 1,400 Network of 220, 132, and 66 KV
MW circuits          Substations                        
2571 Nos
(Rental Inclusive) The purchased  and  own  generated
electricity is being transmitted through PMT,S                            
transmission network. The current 11562 Nos
Fuel types: Gas, HFO transmission losses are less than 3%
Dist Transformers             
External 13992 Nos

WAPDA & IPPs - About 45 HT Underground Cable    

% of the electricity is 4940 KM
purchased from WAPDA &
IPPs
HT Overhead Mains          
2445 KM
Internal
LT Underground Cable      

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1186 KM

KESC - Nearly 55% of the LT Overhead Mains          

electricity is generated 10665 KM
through our own system
Dist Capacity                     
4328 MVA

Fully integrated power utility involved in generation, transmission, and

Operations:                       
distribution. KESC is a public limited company listed on all stock exchanges.

2,350 MW (1350 MW  Own capacity; 379 MW IPPs; 620 MW WAPDA/NDTC;

 Total Capacity:               
Aggreko Rental 50 MW)

 Employees: Around 17,000(52% permanent, 48% contract, 89% staff, 11% officers)

Key Status Overview Key Status Overview

Grid Stations 59           Transformers          

Transmits Distributes
electricity from electricity to 2
generation to million customers.
Transformers distribution at Pole 13,414
high voltage. mounted          
Bulk customers
          get supply from
220 KV/ 132 12 Only 11 Feeders 1,020 11 KV lines.
KV customers on the
transmission           All
network. other consumer
have connections
132 KV/ 11 105           Power Lines from the 0.4 KV
KV Grid stations circuit.

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Total 117 11 KV 7,096

km

Power Lines 0.4 KV 11,718

km

12 220 KV 223  
Lines km

56 x 132 KV 617
km step-down electricity.

5 x 66 KV 149
km

Total 989 Total 18,814

km

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Karachi is also the financial capital and the industrial hub of Pakistan and by efficiently providing electricity, KESC ensures
the engines of the country's economy continue running.

KESC is one of the city's largest employers: around 17,000 people currently work for the company. It is also one of the
oldest companies in Karachi and was established in the city even before the creation of Pakistan in 1947. Incorporated on
September 13, 1913 , under the Indian Companies Act of 1882, the company was nationalised in 1952 but was re-privatised
on November 29, 2005. KESC came under new management in September, 2008; a significant number of professional
managers with experience in running utility and other large companies have joined under this management and will be
running it until the company is turned into a best practice utility. KESC is listed on all three of Pakistan's stock exchanges:
the Karachi Stock Exchange, the Lahore Stock Exchange and the Islamabad Stock Exchange.

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At present, KESC is the only vertically-integrated power utility in Pakistan and manages the generation, transmission and
distribution of electricity. KESC covers a vast area of 6,000 square kilometers and supplies electricity to all the industrial,
commercial, agricultural and residential areas that fall under its network.

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To help us focus better on our customer relations and to improve our customer services, we have recently launched the
Umeed Zone programme; the pilot project is based in Defence Housing Society. After experiencing remarkable success, we
decided to roll out this plan in the entire city.

The objective of this programme is to establish an Integrated Business Centre (IBC). The pilot project has helped us
achieve the quality of services provided, through quick and effective response to request and complaints, gaining high level
of acceptance.

The Defence (IBC) was created by combining the Defence Maintenance Centre and the four Defence Business Operating
Centres into one centre, the IBC. The centre serves 80,000 customers and 107 of our expertly trained employees working at
the centre.

The IBC covers customers from various parts of the city including low-income areas such as Gizri, Akhtar Colony,
Qauyumabad, T&T Colony and Hazara Colony.

The centre has three departments, Customer Care, Customer Accounts and Revenue Protection and Recovery.

With this new approach we have been able to make the process of responding to customer complaints more efficient. We
have streamlined the billing process and improved our revenue collection - a problem that the company has been facing for
years.

IBC has been replicated in other parts of Karachi and there are plans to launch more business centres within year 2009/10 .

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Name Location Plant Capacity Expected Advantage

of Type (MW) Commissioning
Power  Date
Plant

SGTPS SITE Engine 90 July 2009 Higher efficiency

-2 Area Plant machines

KGTPS Korangi Engine 90 Nov/Dec 2009 Higher efficiency

-2 Industrial Plant machines
Area.

560 Port GE 560 2011 560 MW will be

MW Qasim Frame 9E added to the
BQPS Industrial Combine system
-2 Area d Cycle

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S. No. Name of Power Plant Location Available Capacity (MW)

 

 Port Qasim Industrial

Bin Qasim Power  Area  1021
1  
Station

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Korangi Thermal Power  Korangi Creek  55

2  
Station

3 GEJB- 1  SITE, Karachi  80  

4 GEJB- 2  Korangi Industrial Area  35  

 Combined Cycle Power   Korangi Creek  160

5  
Station

       GRAND TOTAL  1351

 

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Currently another Combined Cycle Power Plant of 560 MW is under implementation at Bin Qasim Site. KESC also imports
power from Independent Power Producers, Wapda and Captive Power Plants to offset the deficit of demand-supply gap.

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KESC grid is inter-connected with the NTDC grid system through two double circuit 220 KV transmission lines.

132 KV 132 KV 66KV

Overhead Underground Overhead
Transmission Lines 220 KV

No. of Circuits 18   65  22  3

Length in km 321 602 113 149

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 132 KV    132 KV  66 KV

220 KV Overhead Underground Overhead
Transmission Lines

No. of Circuits 18 65 22 3

  Voltage Level (KV) Transformation

Capacity (MVA)

220 / 132 3000

132 / 11 4283

Grid Stations

66 / 11 60

132 / 66 100

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We are making a concerted effort to acquire new and cost effective sources of electricity generation. Plans are in the
pipeline to partner with other power sector companies to develop Independent Power Plants, to bring coal power plants to
Pakistan and to buy excess electricity from independent captive power producers. We are also looking into acquiring any
new companies that complement our vertical integration business model.

The transmission and grid stations are also being rehabilitated and upgraded with state of the art SCADA system to monitor
online and real time monitoring of the network, compatible with fastest growing industrial, commercial & residential
development activities in the city, to provide stable and uninterrupted power supply to our esteemed customers.

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The modern distribution system begins as the primary circuit leaves the sub-station and ends at the secondary service,
where it enters the customer's meter socket. A variety of methods, materials, and equipment are used among the various
utility companies. Karachi Electric's Distribution department is responsible for lighting up the 11th largest metropolitan area
of the world. This makes it one of the largest electricity distribution networks in the world.

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A number of critically important projects have been commissioned or are in the final stage of completion, which has
improved network reliability and increased transmission & distribution capacity. 132 kV GIS Hybrid Grid Stations at PRL,
Gulshan-e-Maymar and Korangi South have been completed and commissioned. Whereas, five (5) other 132 KV GIS
Hybrid Grid Stations are at various stages of completion and shall be commissioned in a phased manner which would
further improve network reliability and capacity of the transmission network.

Establishment of a computerised system for management of generation, transmission and distribution known as SCADA is
being executed as one of the prioritised projects. The commissioning of this critically important project would significantly
improve efficiency of power system control & monitoring, facilitate timely operational decisions & economic dispatch of
power and would minimise outages and technical losses.

Augmentation and expansion of outdated and fragile distribution network has always been among the priority areas of the
management in order to facilitate valued consumers of the Company by providing uninterrupted supply of electricity. Ninety
eight 11kV feeders have been commissioned and 323 PMTs have been installed & energised. Customers are provided with
one-widow service with the inception of Integrated Business Centre and a transparent computerised new connections
sanctioning procedure has been introduced.

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