ISLAMABAD  - Privatisation Commission and Cabinet Division have informed a Senate panel that the handing over of KESC, Karachi’s beleaguered power supply company, from Dubai-based Abraaj group to Aljomaih group of Saudi Arabia is illegal.

A meeting of the sub-committee of Senate Standing Committee on Water & Power held under its Convenor Shahi Syed on Tuesday to probe the KESC agreement, power utility’s handing over, revision made in the agreement, and supply of 650mw of electricity. Senator Hamyoon Mandokhel and Senator Nisar Khan were present on the occasion while officials of water & power, finance ministries, National Electric Power Regulatory Authority (Nepra), Privatisation Commission, and Cabinet Division briefed the meeting over the matter and also presented documentary evidences to the Senate panel to substantiate their arguments over the issue.

Both the Privatisation Commission and Cabinet Division told the sub-committee that they had declared the handing over of KESC, revision in its agreements and supply of 650mw electricity to the power utility as unlawful.

Officials of PC said that the government had inked one-sided agreement with the KESC in 2009 without seeking the consent of PC over the revision made in the deal. Even, the government in its bid to benefit the power supply company -KESC- had waived off Rs40 billion outstanding dues of power utility and also extended privileges worth in multi billion Pak rupees.

Vice chairman Nepra Khawaja Muhammad Naeem said the KESC is persistently violating Nepra licence by not generating electricity as per its capacity and the regulator (Nepra) has issued show cause notice to the company. He further went on saying that if the KESC management do not give satisfactory response to the regulator then ‘Nepra can fine Rs10 crore to the KESC’ over violation of licence. He also said that power generation capacity of the KESC is 3007mw while the entire demand of its jurisdiction stands between 1200mw to 1400mw in aday.

“If the KESC generates electric power as per its generation capacity then there would be no loadshedding in Karachi and even the National Transmission Dispatch Company (NTDC) in result would be able to supply 650mw electricity to other provinces for meeting power demands,” Khawaja Naeem said, adding, that Nepra, on finding violation of licence due to less power generation against the power producing capacity, had fine the company with Rs3Lac in 2009.

Officials of water & power said that revision made in the KESC deal during 2008 was illegal and it was producing less electric power if keep in mind its installed power generation capacity.

Similarly, officials of Cabinet Division told the senate panel that the government had not sought approval from the cabinet (federal) over the amendments made in KESC agreement besides seeking the nod of Economic Coordination Committee (ECC) of the cabinet.  “Only the Economic Coordination Committee (ECC) of the cabinet gave its approval through a decision, which however necessarily requires extension from the cabinet that is missing in this case, cabinet division official said.

Shahi Syed, Convenor of the sub-committee vowed that he had no personal interest in the matter but it was his responsibility to control the unbridled that weakened the country. He also informed the Senate panel that it was necessary to get approval of Council of Common Interest (CCI) prior to any amendment in the KESC agreement, adding, that even the ECC had no authority to approve the provision of 650mw of electricity to the Karachi Electric Supply Company.