In a recent Dawn article, the government is thinking of a proposal to ‘unbundle K-Electric’ from a single entity and breaking down its generation, transmission, and distribution divisions.
In response to a recent spat between Karachi-based trade bodies led by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and K-Electric for transmitting poor power supply, the new policy has come under consideration.
Special Assistant to the Prime Minister (SAPM) on Power & Petroleum Tabish Gauhar has confirmed that the government will unbundle KE into separate generation, transmission, and more than one distribution company.
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A letter has been written to FPCCI president Mian Nasser Hayat Maggo in which PM’s aide said, “An unbundled KE should be managed by a different set of private entities going forward to avoid monopoly control and single point of management failure or success”.
However, Tabish Gauhar has been asked to wait for PM Imran Khan’s response to the proposal ‘Unbundle K-Electric’, Dawn says.
The unbundling of KE may affect its foreign investors particularly a Saudi business tycoon, who have shaken hands with PM Imran Khan and seek help for the smooth transfer of KE’s over 66pc shares to Shanghai Electric Limited of China.
This will also assist in producing relatively cheaper power, benefit the entire power sector with lower circular debt, and minus the need of setting up additional power plants.
Dawn’s article quoted that the ruling government is already in process of increasing the power supply to Karachi from the national grid from 650MW to up to 2000MW, subject to signing a commercial-based Power Purchase Agreement that is still pending.
The exclusivity and monopoly of KE will expire in 2023 and then the government will provide retail supply to all concerned consumers in collaboration with the government’s power liberalization policy.
However, the article quoted that recently FPCCI President Nasser Hyatt Maggo has sought interventionto postpone the proposed sale of KE shares by its current owners which will have a disastrous consequence for the industries of Karachi, Hub, and Dhabeji.