KARACHI - The Karachi Electric Supply Company (KESC) has reported a huge loss of Rs 9.721 billion in July-March FY08 period due to certain reasons. The supply of gas, declined as a result of annual maintenance that compelled the KESC to use expensive furnace oil to minimise loadshedding and to facilitate its consumers as much as possible. Consequently, fuel bill spiralled by Rs 4.576 billion and this adversely affected the bottom line of P&L account. The KESC has reported this in its new annual report 2008. According to report, the cost of power purchases increased by 10.10 per cent despite 1.9 per cent reduction in number of units purchased which is exclusively attributable to steep rise in furnace oil price registered during the period under review. Operation & Maintenance (O&M) expenses increased by 14 per cent mainly to ensure maintenance and operation of dilapidated transmission & distribution (T&D) network inherited by the new management. Loss before tax, as a result of cumulative impact of contributing factors as above, increased by 20.04 per cent from Rs 8,098 million to Rs 9,721 million, which is mainly attributable to inflated fuel bill due to short supply of gas, partly offset by increased revenue through additional number of units generated and sold. It is relevant to mention that cost of fuel and power purchase, depreciation, provision for bad debts and financial charges collectively constitute approximately 83 per cent (Rs 40,119 million) of total expenditures (Rs 48,560 million) of the company which are, by and large, beyond the control of the management. Meanwhile, KESC has reported 15.9 per cent increase in its revenue from July 2007 to March 2008. Revenue from sale of energy has gone up by 15.9 per cent due to collective impact of 6.9 per cent increase in sales, enhancement of average selling rate by 7.5 per cent and 10 per cent on account of tariff increase allowed by NEPRA from February 24, 2007 and March 1, 2008 respectively and favourable sale mix. Increase in revenue was more than offset by phenomenal increase in fuel bill by 22.1 per cent outbalancing 6.9 per cent increase achieved in units sent out. Availability of gas for power generation decreased to 192MMCFD depicting 70 per cent of total requirement of 274MMCFD during the period under review as compared to availability of 207MMCFD during Jul-Mar 07 constituting 80 per cent of total requirement of 258MMCFD. The deteriorated situation of loadshedding has been reduced in the City and reached up to 6 hours on rotational bases. Loadshedding was at its full rotation during last week and made the lives of Karachiites miserable. The Bin Qasim power plant was producing 850MWs as its all units were operating on Tuesday. It is to recall here that this situation has been improved after the government has intervened into the matter. The company has also started its production through furnace oil which has attributed to the improved situation of power shortage. Sui Southern Gas Company has also restored its supply to the KESC. The gas supply has been increased, it is now up to 240MMCF, previously it was about 140MMCFD, The Nation has learnt from its sources. The KESC's own generation has increased by 5.1 per cent during the period Jul 07-Mar 08 over the corresponding period last year. Increase in KESC generation is attributable to 11.5 per cent increased generation at Bin Qasim Power Station (BQPS) which was partly offset due to reduced generation at KTPS, SGTPS and KTGTPS due to short supply of gas, outages and de-commissioning of KTPS Unit-1. Auxiliary consumption reduced from 8 per cent to 7.8 per cent mainly due to closure of uneconomical KTPS Unit-1. Total KESC units registered an increase of 5.2 per cent as compared to 5.1 per cent increase in units generated. Power purchase decreased by 1.9 per cent over corresponding period last year due to short supply from Wapda by 15.8 per cent which was offset by increased purchases from other sources. Total units available for sale increased by 1.8 per cent, whereas units sold increased by 6.9 per cent, the additional units sold were contributed through significant reduction in T&O losses by 3.3 per cent from 34.1 per cent in Jul 06-March 07 to 30.8 per cent in Jul 07-March 08. Injection of efficient & economical generation in KESC system has been an integral component of turnaround strategy of the new management from day one. Contract for new power plant Phase-I of 220MW was awarded in January 2007 and first two gas turbines (GTs) of 48MW each are likely to be commissioned during next month. Third & fourth GTs would be commissioned later in the year whereas combined cycle is expected to be operational by July 2009.