Rs 474b investment made in K-Electric after privatization, Senate body told

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The Senate Standing Committee on Power Tuesday was apprised that an investment of Rs 474 billion has been made in K-Electric since its privatization in 2005.

The committee which met with Saifullah Abro in the Chair was told that first foreign direct investment of around $ 700 million was made in the company after its privatization.

Imran Qureshi, Chief Regulatory Affairs of K-Electric, apprised the committee that the K-Electric was first established in 1913 and nationalised in 1952. The company has 3.4 million customers and earned its first profit in 2012 after its privatization, he said.

He said K-Electric was currently running six power plants including Korangi Combined Cycle,Korangi Gas Turbine, SITE Gas Turbine, BQPS II, BQPS III, Port Qasim having total capacity of around 1870 MW.

Senator Saifullah Abro said that despite producing 1870 MW with additional of 1100 MW from Government of Pakistan, why K-Electric failed to meet the energy requirement of Karachi.

He inquired the K-Electric officials about the cost incurred on these power projects and details relating to Power Purchase Agreement of K-Electric with government.

The Chairman expressed dissatisfaction over the briefing and directed the officials to provide a comprehensive briefing in the next meeting.

Chairman Committee Senator Saifullah Abro also expressed displeasure over the continuous absence of Federal Minister for Energy (Power Division) and CEO, K-Electric in the meeting. The Committee decided to meet and discuss the matter with the Chairman Senate.

The Senate Committee was also briefed by privatization commission about the privatization of K-Electric.

The officials apprised the committee that, in 1992, the government approved a strategic plan for the commercialization and privatization of power sector. K-Electric was making loses for the last 13 years and the loss for the year 2001,2002 and 2003 were Rs.16.4 billion, Rs 17.7 billion and Rs14.4 billion respectively, they added.

They further informed that privatization process for K-Electric was started in 2001 but it could not complete because no suitable buyers came forward and the process was again initiated in 2003 and the contract was awarded to consortium led by Hassan Associates with a bid of Rs 1.65 per share.

Senator Saifullah Abro directed the Privatization Commission to provide all the bidding details relating to financial advisor in the next meeting.

Moreover, the matter relating to electricity provided to Balochistan agriculture sector for tube wells was also taken up.—APP