2000020910-15 pc raise in KESC tariff likely before sale

ASIF FAROOQI

ISLAMABAD: Karachi Electric Supply Company (KESC) tariff is likely to be raised by 10 to 15 percent before it is put on sale in June, well-placed government sources said.

Though a formal proposal to this effect has not been prepared yet, sources at the Privatisation Commission said that reasonable adjustment in the power tariff was a prerequisite for the privatisation of the company.

The government has vowed to put the entity on sale by June 30.

"Downward revision of tariff by its chairman Lt Gen Zulfikar Ali Khan a couple of months ago was not a prudent decision in the wake of government's desire to privatise the KESC" PC sources told Business Recorder.

They said that by linking KESC tariff with Wapda, the managements of both entities have put the government in a fix, as Wapda rates would have to be adjusted accordingly if KESC tariff is increase.

"The recent reduction in the KESC tariff is causing huge losses to the company and this situation is not ideal for privatisation," sources said, adding that increase in fuel cost had turned the situation from bad to worse as far as financial health of the company was concerned.

Confirming that the upward revision in the KESC tariff was being given a serious consideration, officials at the finance ministry said that the Asian Development Bank has also suggested that the power tariff for KESC consumers should be increased to make the company a viable unit to be privatised.

As the biggest donor for Pakistan's power sector, ADB has proposed several measures for quick and successful privatisation of KESC. "To give a better financial look to the company, the ADB has suggested increased power tariff along with other financial measures," finance ministry sources said.

Taking up KESC liabilities was one of the proposals put before Finance Minister Shaukat Aziz by the ADB delegation, which called on him last week.