Given the existing conditions, massive countrywide loadshedding may continue into the next year. The supply of natural gas to thermal power plants has been discontinued for three months, while there is reluctance on the part of the operators to use furnace oil for power generation due to financial crunch. Then, there are plans to reduce water discharges due to closure of canals for one month for de-silting, which will impact hydropower generation.
To add to the miseries of consumers the commencement of commercial operations of a number of new IPPs (Independent Power Producers) projects scheduled during September-December have been delayed further. Currently, the country faces power deficit of 1,500 MW that will enlarge to 3,000 MW. Eventually, the situation may create a shortage of around 4,000 MW electricity in the national grid.
Pakistan Electric Power Company (PEPCO) has already announced four to six hours loadshedding, the duration of which will gradually increase to six to eight hours, or even more in some areas, in coming months. The National Assembly Standing Committee on Water and Power, taking serious notice of the situation on December 12, has advised the concerned ministry to deal with loadshedding, especially in Karachi, on priority.
Karachi, which meets its significant demand - almost 800 MW on daily basis - through PEPCO system, will be worst affected. Currently, the Karachi Electric Supply Co Ltd (KESC) is hardly operating at 30% of its actual generation capability of 1,387 MW, on one pretext or the other, in a bid to come out of its existing financial morass.
The strategic mode is likely to continue as it serves well the utility company - purchasing cheaper power from PEPCO and on credit. The KESC owes, since long, Rs 75 billion to WAPDA/PEPCO against electricity purchases! Karachi is, once again, in the grip of a series of power shortages and outages.
On December 6, there was a total collapse of generation, transmission and distribution systems, causing a 10-hour breakdown in most of the city areas. Four power generation units, out of six, of the KESC's Bin Qasim power station stopped operations on that day, while the remaining two units were already shut for regular maintenance for quite some time. Similar incident had taken place in May this year when two units of Bin Qasim power plant developed technical fault and Karachi plunged into darkness for ten long hours on the first day and for lesser duration for another two days.
The KESC frequently resorts to unscheduled loadshedding and there are power failures due to intermittent tripping of feeders and damage to cables. Total gross capacity of the entire KESC system (also including KANUPP and the IPPs) is 2,344 MW, whereas line losses (and theft) accounts for over 40%. In comparison, conservative estimate of current demand is of net 2,630 MW electricity, which will increase to 2,800 MW in summer. Thus there is a definite shortage of at least 600 MW in the system.
Practically, there has been no investment made by the company on improving the existing KESC infrastructure, though it had committed to put in $500 million within three years, on its take-over from the government in November 2005. The proposed generation capacity expansion and replacement plans, if at all implemented but half-heartedly, have fallen behind the schedule.
On the other hand, overhaul and refurbishment of its power transmission and distribution systems and services could not be undertaken during these years. Nonetheless, new management of the KESC has announced an action plan to deal with growing power problems in the metropolis expeditiously.
Efforts are being made to bridge widening gap between the generation and consumption of electricity. As a short-term measure, a rental power plant is being commissioned to provide 50 MW into the KESC system by March 2009. The power station, which is on rent for a period of two years, has already started generating 20 MW electricity initially.
Recently, an agreement has been signed by the KESC with foreign suppliers for replacing obsolete gas turbines, of cumulative capacity of 180 MW, at Korangi and SITE power stations. The first phase of generating 90 MW will be operative by November 2009. In addition, it is planned to create power generation capacity of another 1,000 MW, progressively, into the system within a period of three years.
According to the revised plan to upgrade and expand power transmission and distribution system, the company will improve 13 grid stations and install additional 650 new capacitors, in the first phase, within a few months. Currently, the KESC is installing optical fiber ground wire on the overhead transmission lines.
If past is any reference, the projects are not likely to come on stream in time as said to be. The KESC has a record of poor performance and broken promises, having failed to deliver. Immediately on its take-over from the government the management had announced that 45 MW electricity would be made available by September 2006 from the barge-mounted power plant being imported from Kenya.
The project never materialised. The replacement of gas turbines at the four-decade-old Korangi power station has been on cards since long. The KESC awarded in October 2007 a contract to a Greek company to install a 220 MW capacity combined cycle plant at Korangi. The project, comprising four gas turbines of 50 MW each and a steam turbine of 20 MW, was to generate electricity by March 2008. Nothing later was heard of its progress.
Likewise, replacement and capacity enhancement to 830 MW of Bin Qasim power plant was planned in three phases; 276 MW was to come on stream in May 2007, additional 500 MW by August 2007 and the balance 54 MW by June 2008. It has remained a dream so far. In August 2007, the KESC announced it was purchasing ten power plants of 100 MW capacity each from a Russia-based company for installation in different areas. Again, nothing happened.
Yet, the government has recently extended special favours to the KESC. It is expected to provide Rs 10 billion for complete overhauling of entire power transmission and distribution system to be undertaken by the KESC, which has been unduly allowed to increase and adjust its tariff a number of times.
The ECC of the Cabinet has granted it the status of a Distribution Company (DISCO) placing the KESC at par with the DISCOs of the PEPCO, resulting in huge financial benefit to the Private-sector Company that may run into billions of rupees on an annual basis. The government has also allowed duty-free import of power plant machinery by the KESC as permissible to the WAPDA/PEPCO.
During the year 2006-07 the federal government's subsidy to the KESC amounted to Rs 16.846 billion. The subsidy was increased to Rs 19.596 billion in 2007-08. Over and above, the government is likely to accept the KESC's latest demand of Rs 2.5 billion subsidy for the losses it faced due to government's decision to withhold the issuance of bills with new tariff in the months of September and October 2008.
Under the circumstances, the government needs to keep an effective watch on progress of various projects to be undertaken by the KESC, closely monitoring achievement of various milestones of the projects ensuring completion in accordance with revised schedules. Any further delay in adding power generation capacity and upgrading of the transmission and distribution system will be devastating not only to Karachi but also to the national economy.
(The writer is retired Chairman of the State Engineering Corporation and the Heavy Mechanical Complex)