K-Electric demands Sindh government clear outstanding bills

The K-Electric (KE) has written a letter to Sindh Chief Minister Syed Murad Ali Shah, asking him to instruct different provincial departments to pay all outstanding bills of the power utility.

According to the letter, a copy of which is available with The News, KE CEO Syed Moonis Abdullah Alvi says the company was facing cash-flow problems due to non-payment of dues by the Sindh government.

“The company is working tirelessly to manage its routine operations and maintenance along with the purchase of power for the smooth functioning of the operations and to supply safe and reliable power to Karachi and its adjoining areas,” the letter reads.

It says the issue has been communicated to the CM’s office time and again that with large amounts pending in the form of receivables from the Sindh government, the power utility is facing severe constraints in running its day-to-day operations and ensuring supply of power to the city.

The KE’s receivables from different departments of the Sindh government have now increased to Rs19.2 billion, of which Rs 4.5 billion, according to the letter, have been reconciled.

In addition, Rs33.09 billion is also receivable on account of the Karachi Water and Sewerage Board (KWSB) out of which Rs28.5 billion in dues have been fully reconciled.

In its summary, the letter says that the Supreme Court of Pakistan and the Sindh government agreed to devise a payment plan for the reconciled amount, which was also made part of an apex court’s order. However, there have been notable delays in the payment against the mentioned reconciled amount and a payment plan is still awaited.

As a result, the power utility’s borrowing has increased substantially, and the situation is not suitable for the company, the letter says. “Moreover, the capacity of banks to finance KE has been exhausted, inadvertently effecting KE’s working capital and long-term expansion plan,” the letter reads.

The CEO also informs the CM in the letter that the KE has not been a defaulter of current payments to any of its fuel supplier since 2012. However, to be able to continue to make payments to their suppliers and ensure smooth operations, it is essential that the release of outstanding dues is expedited, he says.

“In this regard, we request you to kindly provide us with a time of your convenience for a meeting where my team and I can apprise you of the situation in detail,” Alvi requests

to Shah.

He also informs the CM how the non-payment of dues will result in crisis for the city and the sustainability of the KE’s operations. The letter’s copy has also been forwarded to the local government ministry, the energy ministry, the Sindh secretary finance, the secretary local government, the secretary energy department and the Sindh chief secretary.