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June 8, 2021

Industrial reps refute claims in video released by KCCI

 
June 8, 2021

KARACHI: President Korangi Association of Trade and Industry (KATI) Saleemuz Zaman, President Site Super Highway Association of Trade and Industry (SSHATI) Engr Nisar Ahmed, Founder President Bin Qasim Association of Trade and Industry (BQATI) Muhammad Ahmed, President Federal B Area Association of Trade and Industry (FBATI) Muhammad Ali have jointly stated that a video has been released by the Karachi Chamber of Commerce and Industry (KCCI) on their social media page, mentioning that all seven industrial associations have demanded end to the KE’s monopoly.

It was clarified by all the presidents that a meeting was held at the KCCI to discuss the concern related to the KE’s prevailing issues with trade and industry and its potential takeover by the Shanghai Electric.

However, they clarified that KATI, SSHATI, BQATI, FBATI and all other participants of the meeting did not reach any decision and it was decided that a committee comprising technical experts from each association and the KCCI will study the authenticity of concerns raised regarding discrimination against Karachi’s consumers and will come up with recommendations in the best interest of the industrial and domestic consumers of Karachi after due deliberations.

The participants resolved that the KE has significantly improved from the dark era of the KESC and without discussion any haphazard decisions in the matter might push back the KE to the KESC which will have disastrous implications for the residents and industries of Karachi.

The industrial representatives generally agreed that the K-Electric’s response time on complaints and accessibility has significantly improved and appreciated the company for its commitment to the industries of Karachi and the economy of Pakistan.

The prime minister and his team were appreciated for the decision of providing up to 2000MW supply from the NTDC to the residents and industries of Karachi which will enable zero load-shedding for the industries.

In response to questions about the alleged unfair practice of charging Karachi’s customers higher electricity prices, it was verified from industries of other DISCOs in Pakistan and reached a conclusion that there is a uniform tariff policy of the government of Pakistan across the country, which exists only to prevent any discrimination between customers residing and doing business in any part of Pakistan.

The condition of other state-owned DISCOs was also discussed whereby it was discussed that as per financial statements of companies like the FESCO and the MEPCO, they were receiving subsidy which exceeded Rs 100 billion and Rs 200 billion respectively in the past five years.

What was more surprising was that despite receiving these subsidy amounts, both companies posted cumulative losses for the same period, which were contributing to circular debt which itself is the biggest challenge being faced by the government of Pakistan. KE affairs are also looked over by the NEPRA and the Ministry of Energy and the KE was posting a profit year on year, except 2020 due to COVID, while other DISCOs (except for GEPCO) were posting cumulative losses.

Industry representatives also discussed unbundling of the KE, which is being assumed as a solution to the troubles of Karachi. However, a clear example of unbundling is present in the case of WAPDA into separate generation, transmission and distribution companies which are currently affected by circular debt of 2.6 trillion rupees and creating a huge loss for the national economy. Furthermore, it was also discovered that these DISCOs themselves have obtained a stay order against the NEPRA’s decision to allow power wheeling. It was discussed that unbundling of the KE was due in 2023 as per an agreement with the federal govt and it is the duty of the federal government to protect the interest of Karachi’s consumers above all.

It was verified from technical consultants that there would still be no impact on any consumer’s bills even if the utility is unbundled, because the Uniform Tariff Policy remains in place across Pakistan to prevent discrimination among the citizens of the country but with a big risk of contributing to circular debt if the policy is manipulated.

It was stated that currently we have one company to blame in case of load-shedding/faults once divided into pieces, there will be blame games and instead of one service provider, everyone will blame it to the back end thus making supply of industries unstable.

It was said that subsidy is a domain of the federal govt and it is the responsibility of the federal government not to allow any discrimination with the consumers of Karachi which is the largest economic and industrial hub of Pakistan.

The federal government must take all seven industrial associations into confidence before taking any decision on the KE. These seven industrial areas are not only the actual stakeholders but also the backbone of the economy of Pakistan and their representatives must be present and consulted before making any decision regarding the KE.

It was observed that because of the policies of the current government, the economic growth expectations and targets have been surplus and crossed 3.92 per cent, which has raised the eyebrows of the entire world. It was up to the federal government to decide that disturbing the sale of the KE to the Shanghai Electric will ruin the image of the country and that will give a negative message to the international investors who are observing the remarkable policies of the current government and will drastically affect foreign direct investment.