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Op-ed: Ending K-electric’s monopoly

Karachiites, irrespective of their locality, will say that they have been suffering from K-E’s disastrous monopoly since the last 17 years.  A captive consumer market which includes industries, commercial establishments and homes, is forced to purchase electricity from KE at arbitrary rates.

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The only way to curb power woes of the citizens of Karachi is to end the monopoly of K-Electric (K-E). As such the offer to set up a power generation and distribution company in Karachi by the business community of the city is indeed very encouraging and above all very timely.

The offer: Setting up a power generation and distribution company

The offer is not at all surprising for we have the example of Sialkot International Airport which was built by the business community of Sialkot when Pakistan Civil Aviation Authority (CAA) rejected their genuine demand of an international airport at Sialkot — an efficient cargo hub exporting surgical instruments, leather goods, musical instruments, textiles and sports equipment. In a mega city like Karachi, experts believe that transmission and distribution networks can’t be handled alone by K-E as it has not adequately invested in these networks. k-electric

The result is frequent grid failures, load shedding and cases of heating up of power etc. Therefore, there is a need for a competitor.

The offer has come from the most reliable and trustworthy member of the business community, Siraj Qasim Teli, the former boss of Karachi Chamber of Commerce & Industry (KCCI) at the NEPRA’s K-E public hearing. If accepted, will be something like a dream come true for the Karachiites.

KCCI has asked NEPRA to end the monopoly of K-E on sale of electricity to consumers in Karachi, who are suffering at the hands of KE for over 17 years. The disturbances in regular supply and high cost of electricity are badly affecting city’s trade and industry, resulting in shortfall in our exports despite being globally competitive.

It is also affecting the life of every Karachiite, because ultimately all additional cost incurred by the manufacturers due to costly and not-so-dependable electricity is ultimately passed on to the general public, of which 40 per cent is living below poverty line.

Read More: PIA, Reko Diq & K Electric: Mistakes made while contracting with foreign companies

K-Electric’s disastrous monopoly

Karachiites, irrespective of their locality, will say that they have been suffering from K-E’s disastrous monopoly since the last 17 years.  A captive consumer market which includes industries, commercial establishments and homes, is forced to purchase electricity from KE at arbitrary rates. He also suffers from over-billing due to faulty infrastructure and electric meters which can be manipulated. In short industrial, commercial and residential consumers are at the mercy of K-E with no other options but to suffer.

Karachi the financial and industrial capital of Pakistan which generates over 65per cent of the total national revenue definitely deserves to have smooth, flawless and uninterrupted supply of electricity at a very competitive rate which is not possible in a monopolistic competition.

It is only possible if they a have a right to choose the company keeping in view the price and the service being offered to them. Such companies may post their rates for residential as well as industrial customers on their web sites so that the consumers can get the rates offered to them and contact those suppliers directly they consider is the best suited to them.

Read More: K-Electric is responsible for 19 deaths in Karachi, NEPRA

Creating a healthy competition in Karachi k-electric

It is time for the federal government not only to allow but to subsidise and facilitate other energy providers to enter the market to create a healthy competition in Karachi, which may be followed in other cities also.  According to a rough estimate, Karachi’s power demand is between 2,700 to 2,900 megawatt during the summer. Very seldom during heat wave, the demand jumps to over 3,300 MW.

K-E produces electricity from its own generation units with installed capacity of 2,267 MW and in addition, has arrangements with external power producers for around 1,360 MW which includes 800 MW from the National Grid.

Moreover, the electricity that it gets from the national grid is subsidised, while the gas they get is provided on priority basis. And above all it has also benefitted from debt write offs in the past. Despite such huge concessions K-E not only fails to cater to the city’s power needs, it has the cheek to say that it will continue to carry out scheduled outages.

There are a number of ways to generate electricity but for a new entrant generating electricity from Karachi’s garbage or municipal solid waste could be a better option. It would also solve the problem of garbage disposal which is going from bad to worse, day by day. In the present scenario, this technology may help in bringing some relief to the city from the dual problem of power outage and sanitation.

Read More: Despite disasters, why is DHA Karachi still the place to be?

Examples from other countries

According to the U.S. Energy Information Administration (EIA), in 2018 a total of 68 U.S. power plants generated around 14 billion kilowatt-hours of electricity from 29.5 million tons of combustible municipal solid waste (MSW). A number of countries are planning or have planned to generate energy from waste.

Bangladesh is planning to set up its first waste-to-energy power plant in a bid to address the country’s waste problem and expand the renewable energy technology in the country. Accordingly the government will develop a municipal waste-based power plant at the outskirts of capital Dhaka and is forming a company to set up and operate the power plant. The project will be first in the country to use waste for power generation.

Bangladesh has plans to boost renewable energy generation and has set a target to have 5 per cent power generation from renewable energy sources by the end of this year and 10 per cent by 2020. India has so far installed 94 waste-to-energy projects for the generation of power from urban, industrial, agricultural, and municipal solid waste. k-electric

Read More: NEPRA drops power bomb on consumers battling rains, inflation

In Karachi, a pilot project costing $5 million to produce 486 metres cubic feet of bio-gas and 25 kilowatts of electricity per day from cow dung was commissioned in the Landhi Cattle Colony in August 2008. A British company, HiRAD Technology, had installed this plant as a pilot project. The formal inauguration ceremony of the project was to be held after the successful results of the commissioning. But nobody knows what happened to the project.

NEPRA was created to introduce transparent and judicious economic regulation, based on sound commercial principles, to the electric power sector of Pakistan. It reflects the country’s resolve to enter the new era as a nation committed to free enterprise and to meet its social objectives with the aim of improving the quality of life for its people and to offer them opportunities for growth and development. So NEPRA must now fulfill its obligation by favourably responding to the demand of Karachi’s business community.

Khawaja Amer is a freelance journalist. He has worked in major international & national papers including Khaleej Times and The News International. He contributes frequently to Dawn and Express Tribune. The views expressed in this article are the author’s own and do not necessarily reflect Global Village Space’s editorial policy.

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