25MW plant starts production

KARACHI - Karachi Electric Supply Company CEO Tabish Gauhar has said that the official inauguration of 25 megawatt Aggreko Rental Plant at Haroonabad, SITE, reflected the managements commitment to add more generation capacity to the utilitys network. Gauhar was of the view that the opening of 40 MVA Grid Station at Memon Goth and the Integrated Business Centre (IBC) in Defence also demonstrated the KESCs efforts towards strengthening the transmission network and improvement of customer service and quality. He said that since September 2008, the KESC had already added 450 MW of internal generation capacity to the system; and to cater for the future demand, an ambitious programme has been embarked upon to add more megawatts. Under this programme, a 560MW power plant is under execution at Bin Qasim to be commissioned by 2012, 87 MW of third party contracts have been signed with small suppliers under the Captive Power Policy, recently where three MoUs have been signed, one with Oracle coal fields for the development of a 300MW coal-fired power plant at Thar and two MoUs with Chinese companies to add about 700 MWs to the system using local and imported coal. The CEO further said that the KESC had been actively pursuing renewable energy solution to meet the future needs of the Metropolis; the utility was in active discussion with General Electric (GE) of USA and High Mark Energy of Canada to explore the use of bio-gas from waste product for electricity generation. Six new grid stations had already been constructed and another three were due to be completed by the third quarter of this year, which would relieve the load on the existing grid stations and serve new customers. The KESC had also been revamping the distribution infrastructure across the 18 towns of Karachi under Rs 2.5b Model Town Project due to be completed within this year. To improve the customer service and provide one-stop solution to the customers, three Integrated Business Centers (IBCs) had been launched, in North Nazimabad, Gulshan and Defence. By the year end, 25 new IBCs would be launched covering entire consumer base of the KESC, he said and added that the number of agents at call centre operations had been increased from 70 to 350 over the last year. While referring to investments since October 2008, Gauhar said that Rs 20 billion of fresh equity (Rs 16 billion from Abraaj Capital through KESC Power, and Rs 4 billion from Government of Pakistan) had already been injected into the company. Over the next two years, both the core shareholders would inject an additional Rs 22 billion of equity into KESC into generation, transmission and distribution lines (Rs 14 billion from Abraaj Capital and Rs 8 billion from Government). He pointed out that this was a record investment in the power sector in Pakistan over such a short period. In terms of the challenges faced by KESC, the issue of circular debt had created a severe liquidity crisis for KESC, he stated and disclosed that a huge amount of Rs 45 billion was due to be paid by State-owned entities. Dispelling a misconception, he further disclosed that notwithstanding the acute liquidity crisis faced by the company, the KESC had paid Rs 38.74b to SSGC (including Rs 1.40 billion paid on Jan. 5) and Rs 25.4 billion to NTDC/PEPCO (including tariff differential) since September 2008. The CEO maintained that the key operational challenge faced by KESC remained reducing the transmission and distribution losses, including rampant theft across the city and non-payment of the electricity bills had a direct impact on loadshedding and power breakdowns. He said that the utility had announced a series of measures to support the Bolton Market businesses affected by the bomb blast and arson attacks on Dec. 28, including paying off their December 2009 electricity bills, among other initiatives. Finally, the CEO asked all the stakeholders of KESC to work together to fix the system, and recognise the fact that it would take time.