Observer Report
An agreement between K-Electric and the PPP government has emerged through which the government wrote off billions owed by the power utility.
The amended 2009 agreement allowed for Rs31 billion in arrears to be written off as government losses.
The government also acted as a guarantor for K-Electric to take loans from private banks.
The agreement also allowed for the company to pass orders contrary to the country’s laws. In the agreement it’s written that if the company submits a request, the government could circumvent certain regulations in order to aid it.
Under this agreement, K-Electric had to submit a quarterly report to the government. It also allowed for the federal government to give K-Electric an additional 650 megawatts of electricity from the national grid. Today, that amount has been increased to 850MW.
The incumbent power secretary and K-Electric CEO’s signatures are on the agreement.
Sindh Energy Minister Imtiaz Sheikh has said that he has called meetings with the management of K-Electric and invited NEPRA and the federal government to join.
This agreement is from 2005 and 2009, he said, adding that since then the minister has changed as has the K-Electric board.
Subsidies are given to K-Electric every tenure, he said. We must now sit together and fix this, he said. He invited the NEPRA chairman and federal government to help.
He said the agreement must be examined properly and they must check how much development K-Electric has done and how much it has improved its system under the agreement.
