KARACHI: The minority shareholders of K-Electric (KE) on Tuesday raised concerns over the widening demand-supply gap due to rapid urbanization and uncertainty surrounding the financing of new power projects in view of determined multiyear tariff 2017.
Faisal Bengali, one of KE’s minority shareholders during the 106th Annual General Meeting (AGM) of K-Electric said that multiyear tariff determined by NEPRA for K-Electric in March 2017 offers even lower return as compared to other private sector investments in the power sector that have over 20% guaranteed returns. There is a radical shift in regulatory policies in the determined tariff which will not only negatively impact the company’s revenues but will also make financing for current infrastructural improvement projects unfeasible.
Another minority shareholder believed that the privatization of K-Electric was followed by significant investment in strengthening Karachi’s power network. “The policy of exempting industry from load shedding was necessary to boost industrial growth as Karachi is home to some of the largest industries in Pakistan and makes a significant contribution to the country’s GDP,” he said.
The shareholders also raised their reservations on current challenges facing the company including widening demand-supply gap due to rapid urbanization, uncertainty surrounding the financing of new power projects in view of determined multiyear tariff 2017 and its implications on the company and the citizens of Karachi.
Some minority shareholders also raised individual power complaints for which they were directed towards a customer facilitation counter set up outside the meeting hall. Few other issues raised and addressed include decommissioning of old power plants, replacement of copper wire, slow installation of Aerial Bundled Cables etc. A suggestion about developing a payment mechanism was also made for pilgrims who are out of home and unable to pay bill on time.
Earlier, CEO of K-Electric Tayyab Tareen gave an overview of company’s achievement and updated the shareholders about its outlook and current projects. “Groundwork for 900MW RLNG based BQPS-III has been initiated worth USD 1 billion whereas major transmission project, TP-1000 worth USD 440 million is also on track and expected to achieve COD in Feb 2019.
The power utility of metropolis, KE declared profits of Rs 32.75 billion including deferred tax of Rs 7.95 billion during FY 16 as compared to Rs 28.32 billion during the same period of FY 15, reporting a growth of 15.6%.
The company’s earnings per share (EPS) also increased to 1.19 rupees per share as compared to 1.03 rupees. Moreover, reduction in T&D losses, which decreased to 22.2% compared to 23.7% last year, showing a reduction of 1.5%, together with the gains resulting from higher electricity units sent out.
Published in Daily Times, September 20th 2017.
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