ISLAMABAD: The Federal Government and Karachi Electric (KE) have reportedly failed to evolve consensus on the Terms of Reference (ToRs) of Arbitration Agreement, well informed sources told Business Recorder.
At least three or four high-level inter-ministerial meetings have been held so far to sort out issues related to payables and receivables but the outcome of those meetings remained inconclusive.
The last meeting of inter-ministerial committee was held on March 4, 2021 at the Ministry of Privatisation to finalise the Arbitration Agreement regarding receivables/ payables of K-Electric.
The sources said, Power Division argued that it is not responsible for the payable/ receivable issues of KE with Karachi Water & Sewerage Board (KW&SB), Sui Southern Gas Company Limited (SSGCL) and Finance Division.
Power Division, sources said, has asked KE’s management to resolve its financial issues with other Ministries/ organisations separately and not make it part of Arbitration Agreement with it.
The sources said, KE has been conveyed in clear words that Power Division is not ready to become its hostage and will not become part of any deal with Ministries/ organisations.
"Meeting is rescheduled since few clauses are still not agreed between the GOP and KE management post internal discussions separately," said one of the participants. There is thinking in Power Division that a separate mechanism between the public sector stakeholders needs to be developed to resolve the disputes.
On March 4, 2021, CEO KE also attended a meeting of National Assembly Standing Committee on Power, wherein he stated that he visits Islamabad every week and attends all the meetings. However, when he stated that Secretary Power is a witness of his presence in all meetings, the Secretary, replied that he is seen more in Islamabad than in Karachi in a tone which implied that Secretary Power has serious differences with the KE management.
KE has revised its ToRs a couple of times on the advice of Power Division, which has to submit a viable solution of KE issues to the Prime Minister, with the deadline given to the Power Division is already over.
"If issues between the government and KE are not resolved, power crisis in Karachi will continue to exist and the deadline to sever gas connections to Captive Power Plants (CPPs) will have to be implemented," said, an insider.
Operation of 450 MW first unit of the KE's 900 MW new RLNG-based power plant at Port Qasim is likely to be materialised as KE is starting working on pipeline soon. There is progress on time sensitive part and things are now moving towards right direction. However, the issues of payables and receivables, which is not a time bound will be sort out at a different forum.
SSGC, has, however, indicated to KE that it would supply only 10 MMCFD indigenous gas against 190 MMCFD which will ultimately be passed on to the consumers. It is unclear that where the remaining 180 MMCFD will be consumed.
Chairman Nepra, at a recent public hearing on KE's FCA's and QTA's requests, offered his help to resolve genuine issues of the power utility, and at the same time warned that the regulator will not spare it if electricity is not ensured to the consumers.
Copyright Business Recorder, 2021