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Transparency asks SC to take suo moto action against KESC

Transparency International has urged the Supreme Court to take suo moto notice of Rs198 billion doled out to Karachi Electric Supply Company in the past three years in violation of rules.

In its detailed application in the Human Rights Cell of the Supreme Court, TI has stated that even the ruling Pakistan People’s Party government has declared KESC as Economic Terrorist in the Senate of Pakistan because the state is giving away Rs66 billion per year to it ‘under an alleged illegal amendment in Agreement of 2005 between Pakistan Government and KESC in 2009’.

The Transparency’s application also mentions that on 14th October 2011 it requested the prime minster to take notice of the alleged illegal amendment in the agreement dated April 2009, between GoP & KESC and to terminate the unconstitutional concessions granted to in 2009. “But no action was taken by the prime minister and extra contractual benefits amounting to over Rs198 billion (at annual rate of Rs66 billion) have been dolled out to KESC since 2009, and Nepra has been illegally granting tariff increase to KESC, which was not allowed under the terms of 2006 Agreement.”

The amended agreement signed in April 2009 was even not accepted as legal by the Nepra Board Member Shaukat Ali Kundi. On the request of KESC to Nepra to revise its tariff Shaukat Ali Kundi on 18th December 2009 has clearly stated that KESC privatization agreement terms can not be altered, the application adds. The Transparency International has requested the CJ to take suo moto action against KESC Amendment Agreement dated April 2009 and declare it illegal and void ab initio on the following grounds;:-

-‘That KESC can not be granted tariff increase by Nepra, as KESC is committed not to increase it for the Seven Year Multi Year on the basis of which KESC was put on sale to the private sector.

-That the GoP & KESC Amendment Agreement dated April 2009 is illegal as it is against national interest, and no one is allowed to dole out public funds to benefit others, which is a corrupt act under NAO 1999.

-That 650 MWW supply guaranteed by Wapda to KESC for 5 year is illegal and has relaxed KESC to install new power plants and also caused shortage of electricity in Pakistan.

-That guaranteed gas supply for a 560 MW plant to KESC is illegal as country is facing acute shortage of gas due to this illegal guarantee also.

-That reduced tariff rates for buying Wapda electricity at 25 to 30 per cent of the rates to be paid by KESC under 2006 Agreement is illegal.

-That KESC is found guilty and has failed to supply uninterrupted electrify to its consumers.

-That KESC has caused circular debt and failed to pay over Rs120 billion dues of SSGCL, PSO and Wapda, causing financial losses to these organizations also.

-That KESC is alleged of consuming double quantity of gas and furnace oil for power generation from its old as well as new power plant, as compared to fuel consumed by old plants of Uch power, Saif power and Orient power, causing loss of gas and furnace oil and costlier electricity. The reasons may be entering wrong fuel consumption in books, so that additional tariff adjustment cost may be taken from GoP / Nepra.

-That fuel consumed for generation only 7,826 million kWil in the financial year of 2010-2011 is more than the fuel consumed for generation 19% less power, 9,304 million kWH during 2005-2006, which confirms there is irregularities in fuel consumption statements in books of accounts.

-That KESC has failed to reduce line losses which are above 32 percent whereas Lahore Electric Supply Company (LESCO) has successfully implemented smart meters in the old walled city of Lahore and brought down line losses from 17.8 per cent to 3.5 per cent within 10 months.

-That KESC has artificially declared profit in 2012, and caused 120% increase in its share prices in one month in August/Sept 2012, thus enabling KESC to borrow loans on 100% revalued share process from banks. Though KESC is defaulter of over Rs120 billion of SSGCL, NTDC & PSO, who are also paying bank markup for KESC defaults, which is also heavy loss to exchequer funds, how can there be such an increase in the share price?

-That SECP has failed to conduct detailed audit of KESC as requested by TIP in June 2012.

-That SECP did start inquiry in July 2012 as reported in press, and detailed audit of IPP and also KESC and found irregularities and stated that operation and maintenance cost have been exaggerated.’

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