The Federal Minister for Water and Power, Liaqat Ali Jatoi's relief package for the various categories of electricity consumers of Karachi seeking implementation of reductions in electricity rates announced in the last budget, is indeed laudable.
It may be noted here that the KESC power rates have always been kept higher than the rates charged by WAPDA in the rest of the country, placing the power consumers in the largest city of the country in a disadvantageous position. The inflationary impact of the higher rates has thus been a perpetual suffering for the common consumers in addition to the fact that industries operating in the mega city sustained a higher cost of production than the competing industries in other parts of the country.
The relief package announced by the minister, however, has not been endorsed by the NEPRA - the power regulatory authority. The decision is attributed solely to the discretion of the Federal Ministry of Water and Power and consequently the KESC's losses resulting from the reductions in power rates, would be compensated by the federal government.
The cumulative impact of this step has been estimated at Rs 925 million which will be reimbursed by the federal government. One cannot see any reason why the ministry did not refer the proposal to NEPRA for approval when the cut in the power rates was announced in the federal budget for the entire country.
The proposed relief ranges from 10 paisa to 25 paisa per unit for domestic, commercial and industrial consumers in Karachi and the new rates have been made effective retrospectively from the month of July 2004. This means that the KESC will have to adjust the relief of the past two months in the bills to be issued to consumers from September onwards. Additionally, the installation charges also may be reduced, though not yet clearly stated.
Accordingly, the new connections will be available against payment of Rs 500 and the remaining amount will be recoverable in 9 monthly instalments. Similarly, the time lag between the date of the application for a new connection and the actual installation, is expected to be considerably reduced. More importantly, the minister also announced major concessions for defaulters of the KESC, and their cases may be settled at 50 percent of the defaulted amount covering a period of five years and more.
These measures are understood to have been finalised by the federal minister in consultation with the management of the KESC which alone will be responsible for their implementation. For instance, the proposed steps for expeditiously giving new connections to consumers would have to be efficiently carried out.
There are countless complaints about delay in new connections and it is to be seen as to how far the plans to speedily meet the demand can be implemented by the KESC in the face of the existing acute power shortage in its system. The relief package has been announced incidentally at a time when the city is suffering from the worst phase of power breakdowns for long hours.
The minister in his press conference should have also touched upon some of the improvements in the KESC's operations such as transmission losses, financial status indicating reductions in long and short-term debts, and other important features. It is encouraging to note that the privatisation process of the KESC is moving apace with three active intending buyers, local and foreign, in the field.
According to the Managing Director of KESC, Brigadier Sadozai, bidding for privatisation is scheduled to be held on 27th November this year. It may be emphasised here that the ills of the KESC are by and large deep-rooted which can hardly be corrected to any significant extent without large-scale doses of fresh investments in up-gradation and modernisation of the utility's generation, transmission and other facilities.
This can only be put through by the induction of energetic and resourceful private owners after the privatisation.