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KESC gets Rs one billion as first tranche for restructuring

KARACHI (May 26 2003) : The Karachi Electric Supply Corporation (KESC) has received the first tranche of Rs one billion from the federal government for its Rs 13 billion restructuring and rehabilitation plan.

Sources in KESC told Business Recorder that the Corporation had been anxiously waiting for the instalment to start the plan.

The KESC would start restructuring and rehabilitation plan from June 1, sources said.

The work on the plan was started in January this year, following completion of all relevant studies.

As per government decision, the KESC had to be privatised by September 2000, but because of bad law & order situation in the city and the international situation, no bidder came forward and the government decided to make it attractive for foreign bidders and to bring about turnaround in the utility with available resources.

The situation warranted an improvement plan which was speedily prepared and submitted to the government which approved it.

According to the plan, Rs 4.5 billion will be spent on rehabilitation of distribution system and to check power theft, while Rs 6 billion will be consumed on improving the transmission system with construction of new grid stations in areas where commercial and industrial activity is taking place by the establishments themselves with regard to electricity.

The power utility will spend Rs 2 billion on the establishment of a state-of-the-art 'Load Dispatch Centre'.

Similarly, the generating stations are to be rehabilitated and the plan will take 4 years to complete.

As a result of this plan, the KESC, which is running in loss to the tune of Rs 17 billion at present, will be in the black with a profit of Rs 1.5 billion annually by 2006.

The KESC system is facing a generation shortage of 1000 MW and unless new plants are set up to generate the equal amount of power, this shortage will continue to persist.

As an interim measures, the government has approved the linkage of KESC-Hubco to get direct power supply of 1200 MW from the latter.

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