KESC Power Limited:

Description:
Karachi Electric Supply Company Limited (KESC) is an electrical company in Pakistan. The company
is engaged in the generation, transmission and distribution of electric energy. The company mainly
serves the industrial, commercial, agricultural and residential customers. KESC has a license to
serve the entire Karachi and its surrounding. The company’s generating system has an installed
capacity of 1,890 megawatts (MW). The company provides electricity to a total area covering
around 6,000 square kilometers.

After KESC's privatization in late 2005, assisted by ADB, its new owners have embarked
on a three-tier turnaround strategy based on (i) Organizational restructuring and
development; (ii) system balancing, modernization, and replacement; and (iii) generation
capacity enhancement.
The turnaround strategy requires capital expenditure during 2007-2009 of approximately
PRs52 billion: (i) generation rehabilitation and expansion, approximately PRs34 billion;
(ii) transmission and distribution (T&D) network investments, PRs17 billion; and (iii)
upgrading of commercial systems and rehabilitation of existing generation facilities,
PRs1 billion.

Objectives and Scope:

The project outcome is to make Karachi consumers have access to reliable supply of
power at reasonable cost from KESC. These benefits will accrue to the 16 million
inhabitants.The Project will undertake the following:

(i) The new investment will increase net electricity generation by more than 750
megawatts and greatly improve KESC's T&D network.
(ii) KESC is aiming to reduce energy losses from the current, unacceptably high, levels;
and to install new, efficient generation plants. These measures will lead to significantly
greater energy efficiency with financial, economic, and environmental benefits.
(iii) The success or failure of KESC will have major implications for future
privatizations. Success should help sustain the political and public will for further large-
scale privatization.

Status of Development Objectives:

1. 220 MW of new capacity is on line which provides lower cost and more reliable
power to Karachi residents.
2. The Integrated Business Center concept has been rolled out to approximately
36% of KESC's consumer base, reducing technical and commercial losses.
3. KESC, through it Corporate Social Responsibility programs, has delivered
various water purification and educational programs to communities in the areas
of its generation plants and consumer bases. They have so far deployed Rs9.5
million to fund these program with Rs22 million budgeted through March 2010.

Status of Operation/Construction:
Generation Projects:
 (i) The 220 MW Korangi Thermal Power Station expansion was formally inauguated
and is now in commercial operation.
(ii) The 560 MW Bin Qasim Thermal Power Station expansion is anticipated to be
completed in January 2012. Detailed design will be completed by September 2010.. 1 of
3 gas turbine generators sets has been delivered and the remaining 2 by 31 July 2010. GT
foundations complete, HRSG foundations 70% complete. GT hall structural steel 80%
complete. Project is on schedule. Transmission and Distribution: (i) KESC has increased
transformer capacity in the grid and has implemented supervisory control and data
acquisition (SCADA) systems for load dispatch management and real-time system
monitoring. The system has been rolled out to all 60 Karachi-are grids. T&D losses
decreased from 35.85% in FY2009 to 34.90% in FY2010.
Business Operations:
(i) The Integrated Business Center (IBC) concept is being deployed across the company
to improve collections and reduce commercial losses. Commercial losses from theft and
poor meter performance have been reduced from 24% to 16% since April 2009.
Advanced meter reading (AMR) instruments are being deployed to key customer areas.

Material Changes:
In 2009, the Government of Pakistan consented to Abraaj Capital Limited of Dubai to
invest in KESC by way of subscribing to 51% of KES Power Limited shares, the parent
company of KESC. Abraaj has installed a new executive and management team focused
on implementing the turnaround strategy and replaced the operations and maintenance
management contract

Made by: Ammara Shahid

OUR CONSUMER OBJECTIVES

Growing the measure of our customer service and customer satisfaction

Providing value for money and striving to provide electricity at a reasonable price, especially for
ordinary citizens

Implementing high standards in quality assurance, process, reliability and public safety, through
the implementation of global best practice

Striking a balance between economic and environmental need

Playing a sustainable social rols in the communities of Karachi

AZM essentially means intention or resolve in Urdu and reflects our determination to turn the
company around. The programme facilitate KESC in realising its vision. Our people contribute
their suggestions regarding a vision for the company. These suggestions will then be pooled in
and the best one from the department will be selected.

The ideas from the different departments will be collected and the best one from each division will
be implemented. The programme also aims to promote more team spirit and we have come up
with five basic principles all our employees should stand for. These are;

* Belief: We can achieve what we put our minds to

* Determination: We are undeterred by adversity, obstacles, and instead we welcome a good
challenge
* Passion: We derive joy, energy and creativity out of the pursuit of our goal
* Harmony: We are united by our shared goal to bring electricity to Karachi
* Diversity: We will respect one another's personal contribution and individuality

Intro: The licensed area of KESC is spread over entire

Karachi
and its suburbs up to Dhabeji and Gharo in Sindh and
over Hub, Uthal, Vindhar and Bela in Baluchistan.
•The privatization of the Company has been finalized in

November 2005 with the transfer of 73% shares of

Government of Pakistan along with Management
Control to the new owner via M/s KES Power & others

Issues:
KESC facing financial crisis as government departments not paying dues

KARACHI (January 01, 2010) : Chief Executive Officer (CEO), Karachi Electric Supply Company (KESC)
Tabish Gouhar has said that KESC was facing serious financial crunch as many government departments
have not paid KESC dues. Speaking at a meeting of Korangi Association of Trade and Industry (KATI),
Gouhar said that only three hours load-shedding is being carried out in the city due to shortage of funds to
pay oil bills.
For the development of a countries economy electricity is the back bone but unfortunately
Pakistan does not have enough production of it or the cost of using it is very high.Karachi
being the hub of industries is faced up to eight hours load shedding daily other than this tariff
have been raised by the Karachi electric supply company which have lead to cost push
inflation as electricity is one on the major input for the production process.

Back in 2002 government of Pakistan privatized state run natural monopoly. By selling it to a
U.A.E based firm .Just after that the situation kept on getting awful proving the decision a
disaster.
Soon after the privatization the management of K.E.S.C tried its best to solve the problem of
electricity theft which has been common since Pakistan came in to being not just for the
resident use but some well know companies theft it for commercial use in order to minimize
their cost of production and make massive profits. It tried its best to prevent electricity theft
but failed to. In the end it took a decision to raise its tariff so that it can cover the cost of
producing it.

On other hand the government did not took any action to stop K.E.S.C from taking this
decision This question strikes everyone’s mind.” when the government knew what will be the
future circumstances why didn’t it took any valid action?”

Now let us look how once can overcome this. “Generator’s” This one word gives the answer.
Most of you would have been using generators at present and will not agree that it is the
best alternative as the cost of operation is very expensive if you are operating it in petrol, but
they can be converted in to natural gas which gives an average of 5 RS per hour. Wonderful!
Isn’t it? But control your happiness it is illegal to use gas generators without obtaining a
licenses. This is Pakistan baby!

Another option is wind power which has been recently introduced in Pakistan It is costing
approximately 1500 US $ depending on the output.

If you are from a developed country you must be thinking how lame and wasteful article it is
but trust me for the people of Pakistan it is a major issue