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February 10, 2018
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K-Electric unveils Rs335 billion investment plan

Business

February 10, 2018

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KARACHI: K-Electric planned to invest Rs335 billion in power generation, transmission and distribution sectors in the metropolis within the next five years, the company’s top official said.

“The company has already made more investment ($1.4 billion) than its initial commitment which helped improve generation, transmission and distribution networks,” Syed Fakhar Ahmed, chief marketing and communication officer of K-Electric (KE) told journalists.

“K-Electric has planned to invest additional Rs335 billion by 2023 in power production and distribution sectors of Karachi,” Ahmed said.

Terming the unplanned growth of the city a critical challenge, K-Electric executive said “Where there used to be a small house now you see a plaza. There are so many unapproved buildings coming up all over the city”.

“Power theft is a big menace which is why our biggest focus is to remove kundas (illegal connections), educate people and bring more and more people on to the grid,” Ahmed said.

K-Electric meets energy demands of Karachi and some adjoining parts of Balochistan. Currently, KE’s five plants in combined cycle have the installed generation capacity of 2,267 megawatts.

“Our initial efforts helped rehabilitate and turn the Bin Qasim power plant more efficient,” the official said. “Then we brought online more plants while adding 1,057 megawatts to the system. We also added more grid stations and changed cables, including bringing in aerial bundle cables to reduce tripping, distribution losses and power theft. It also helped end unplanned load shedding.”

KE was incurring multibillion rupees in losses in 2009 when the existing management of Dubai-based Abraaj Group took over. The power generating plants were old and dilapidated and the relationship between the Karachi Electric Supply Company and the stakeholders was even worse.

Different government departments owed more than Rs90 billion in bills to KE. Transmission and distribution losses have, however, been reduced to 22.9 percent from the pre-privatisation level of 36 percent. In some areas, the losses were slashed up to 80 percent through installation of aerial bundled cables.

In 2016, Abraaj agreed to divest its majority stake in the utility to a Chinese company, but the deal is yet to be finalised.

Ahmed further said KE has so far not paid any dividend as the profits have been re-invested into the business. “This has resulted in exemption (from power outage) of 61 percent of Karachi including all industrial zones and strategic installations.” KE executive said the continuous stream of investment from KE has further strengthened the power infrastructure and “reinforced its long-term commitment to serve the people of Karachi”.

The power utility is also building 29 integrated business centers which, through one-window operation, offer solutions to the consumers in addition to operate a complaint-registration telephone line.

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