ISLAMABAD: Privatization Commission (PC) has dissociated itself from exclusivity issue of Karachi Electric (KE), suggesting that National Electric Power Regulatory Authority (Nepra) should consult KE and Shanghai Electric Power (SEP) and other relevant stakeholders, well informed sources in Nepra told Business Recorder.
The power regulator, which created a hype with respect to KE distribution licence issue, has already conducted a public hearing in Karachi which was upstaged by the participants.
PC's Director Admin, in a letter to Deputy Registrar, Nepra, referred to the latter's letter of September 29, 2020 seeking comments from Privatisation Commission (PC), specifically with regards to proposed acquisition of K-Electric Limited (KEL) shares by Shanghai Electric Power Company Limited (SEP), in view of proceedings being carried out by Nepra on this issue.
The public hearing notice published on Sep 10, 2020 on proposed modification in the distribution licence of KE issued on July 21, 2003 did not incorporate any questions framed by the Authority.
PC, in its letter, states that a question framed for public hearing on the matter specifically referred by Nepra through its letter, would have given an opportunity to KEL to address it during that hearing since Nepra has to take the decision pursuant to outcome of the public hearing as per Section 26 of Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997.
PC is of the view that KEL was privatised as a vertically integrated utility company having its dedicated power generation facilities for electricity sales in its licenced service territory. Later, multiyear tariff awarded by Nepra has also allowed a further investment of $ 730 million to be made by KEL towards the power generation facilities as a 'vertically integrated utility' - the first phase of which is expected to operational by mid 2021.
During the hearing held on Sept 21, 2020, and participated by a senior official of PC via Zoom link, it was not clear what workable alternate and its timeline has been envisaged by Nepra if it does away with KEL's distribution exclusivity under Authority proposed modification to the KEL's existing licence, the letter added.
Privatisation Commission, in its letter has highlighted that KES Power Limited and SEP are independent companies with no involvement with PC in their corporate and strategic decision making, including the proposed 66.4% sale /purchase of KEL's shares.
"SEP, in its letter of September 28, 2020 has expressed its reservations if KEL's exclusivity is not maintained as per the licence," PC maintained.
Nepra has been asked to seek comments directly from both these entities as well as from relevant Ministries under applicable Regulations (1999) and review those comments and implications, if any, under the regulatory lens or “public interest while it makes determination pursuant to Section 26 of NEPRA Act, 1997 and in compliance with the directive of SC in HR Case. No, 20883 of 2018.”
Copyright Business Recorder, 2020
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