ISLAMABAD - The federal government informed the Supreme Court on Monday that it is facing paucity of funds to the tune of Rs 269-479 billion in order to facilitate K-Electric.
The K-Electric Limited which was earlier known as the Karachi Electric Supply Company Limited (KESC) is a privatized public utility principally engaged in the business of generation, transmission and distribution of electricity in Karachi and other adjoining areas of Sindh and Balochistan.
A three-member bench, headed by Justice Jawwad S Khawaja, was hearing the appeal against Sindh High Court, which had restrained the power company from interrupting the electricity supply to KWSB. The company had requested the apex court to set aside the SHC order and direct the federal government to pay it the outstanding electricity charges of the KWSB to the tune of Rs28.7 billion as of April 30, 2014 excluding mark-up.
Attorney General for Pakistan Salman Aslam Butt on behalf of federal government submitted a statement before the bench. The notices were served on AGP and the advocates-general of all provinces to assist the court in the case.
According to the petition, KWSB is consistently defaults on its monthly bills which now after recent increases in tariff by the National Power Regularity Authority (NEPRA) amount to Rs600 to 700 million per calendar month. As a result, the petitioner on October 12, 2011 had disconnected four electricity connections. Later, the respondent had approached the SHC by relying on the Implementation Agreement was signed between K-Electricity Limited and federal government.
According to the agreement, the federal government is bound to pay the outstanding amount. However, it, submitting its concise statement, said it was not obliged to make payment to K-Electric in respect of the KWSB’s outstanding amount, which is Rs28.74 billion.
The government further stated that despite availing financial concessions K-Electric had failed to take 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 detriment of the federal government national grid and citizens at large.
“K-Electric intentionally and consistently under-utilized its own plants and relied upon energy from the NTDC despite having sufficient capacity,” it said.
The reply further said that the increased dependence on the NTDC puts pressure on the already strained resources of the NTDC resulting ultimately in increased load-shedding throughout the country.
The reply further states that K-electric’s local demand for electricity is at average 2000 to 2500 MW and as per its own website, the company’s total capacity is 2710 MW after deduction of 650 MW from NTDC.
“Accordingly, K-Electric has a sufficient capacity available in order to meet all of its demands. However, the company continues to rely on the electricity from the NTDC. Approximately 365 MW of its generation capacity is stated to be provided by independent power plants including Tapal and Gul Ahmad. However, the company also intentionally under-utilizes these plants.”
The federal government also submited that in spite of significant finances given to K-Electric, no benefit was received by the federal government or the people at large and the only benefit was derived by management of K-Electric itself.
“K-Electric has presented the issue before the top court in an extremely selective and narrow manner. The company is part of a multi-faceted payment chain and has payment obligations towards many government entities.”
The government also submitted details of the amount Rs130.3 billion, given by the company to the government’s departments including NTDC Rs 55.995 billion, SSGC Rs 55.485 billion and PSO Rs 3.228 billion.
K-Electric is not the victim of gross non-payment rather it is guilty of consistent non-payment to various entities as it currently owes more than 130 billion rupees to the federal entities, says the reply.