K-Electric threatens Sindh govt to start load-shedding in Karachi as its receivables touched Rs 52.2bn

KARACHI: K-Electric has started pressurizing Sindh provincial authorities that it would start unannounced load-shedding in Karachi if the authorities fail to pay Rs 52.29 billion.

According to sources, this huge amount under the head of electricity bills is pending since past couple of years however the provincial authorities seemed reluctant to resolve the issues at the earliest. Interestingly, neither the Chief Minister Sindh Syed Murad Ali Shah nor Sindh’s Energy Minister Imtiaz Shaikh bothered to sit with K-Electric authorities and try to resolve this serious issue.

In this regard, the Chief Executive Officer (CEO) K-Electric, Syed Moonis Abdullah Alvi, forwarded various letters dated April 9, 2019, May 13, 2019 and October 1, 2019 to the Chief Minister Sindh to expedite process of payments of bills so that the power utility could ensure smooth functioning in the port city but of no avail.

“As apprised in our the letters, K-Electric is facing severe cash flow issues due to the non-payment of dues by the government of Sindh. The company is working tirelessly to manage its routine operations and maintenance along with the purchase of power for the smooth functioning of the operations and to supply safe and reliable power to Karachi and its adjoining areas.

However, this has been communicated to your office time and again that with large amounts pending in the form of receivables from GoS, KE is facing severe constraints in running its day-to-day operations and ensuring seamless supply of power to the city”, K-Electric letter letters said.

The letter further says: “KE’s receivable from different departments of government of Sindh has now increased to Rs 19.2 billion of which Rs 4.5 billion have been reconciled. In addition Rs 33.09 billion is also receivable on account of KW&SB out of which Rs 28.5 billion in dues have been fully reconciled.”

“In its summary to the Supreme Court of Pakistan, GoS agreed to devise a payment plan for the reconciled amount, which was also made part of SC’s order. However, there have been notable delays in the payment against the mentioned reconciled amount and a payment plan is still awaited. As a result, K-Electric’s borrowing has increased substantially and the situation is not sustainable for the company. Moreover, the capacity of banks to finance KE has been exhausted, inadvertently effecting KE’s working capital and long term expansion plan”, the letter added.

According to CEO K-Electric, K-Electric has not been a defaulter of current payments to any of its fuel suppliers since 2012, despite the cash flow situation. However, to be able to continue to May payments to our suppliers and ensure smooth operations, it is essential that the release of outstanding dues is expedited. In this regard, we request you to kindly provide us with a time of your convenience for a meeting where my team and I can apprise you of the situation in details.

Sindh Minister for Energy Imtiaz Ahmed Shaikh told that the bills worth Rs 6 billion have so far been reconciled and under process at the finance department. While the reconciliation process of Rs 6 billion bills are under process.

“The Sindh Government has nothing to do with the power bills of the Karachi Metropolitan Corporation (KMC), Karachi Water and Sewerage Board (KWSB), District Municipal Corporation (DMCs) and Karachi Development Authority (KDA) as the provincial government gives single line budget to these organization and they are responsible to clear their utility bills what so ever”, the minister added.

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