KESC to add 400 MW rental power plants

Islamabad: The management of Karachi Electric Supply Corporation has asked the government to resolve the utility's circular debt issue as any delay would lead to its bankruptcy, official sources said.

These apprehensions were conveyed by the majority shareholder Nasir Al Maani at a meeting chaired by Water and Power Minister Raja Pervaiz Ashraf in Karachi recently.

The government, which owns 26 percent shares in the entity, however, constituted a committee under the chairmanship of Wapda chief Shakeel Durrani to sort out all financial issues within one-and-a-half weeks. 'The utility needs $200 million investment immediately and the government must contribute its proportionate share,' the sources quoted the KESC management as saying.

Ambassador at large Salman Farooqui, who was also present in the meeting, reminded the KESC owners to recall their presentations made to the President of Pakistan wherein, it was promised that KESC would immediately invest $400 million in the system to get itself converted into a world class utility company, but this never happened.

Also, in July 2006 during a similar presentation it was said that 975 MW will be added to the system and Rs 25 billion spent on improving it by the year 2008, but nothing has happened so far. Farooqui stressed that KESC should have brought in the new O&M contractor immediately.

The sources said that KESC management has agreed to add 400 MW rental power plants within six months whereas 150 MW rental power plants would be installed at Nooriabad by Pepco for exclusive supply to KESC on the rates to be determined by Nepra and a committee headed by the Secretary Water and Power will monitor the progress.

KESC would also immediately enter O&M contract with an operator of international repute as envisaged in the privatisation related agreements, the sources added. The power utility would actively pursue long-term projects of 220 MW (Korangi) and 560 MW. The Korangi project would start contributing 80MW on single cycle by the end of April 2008 and an agreement for 560 MW shall be concluded/signed within 30 days.