The long-awaited deal is all set to be finalized by the end of this year, as China’s state-owned Shanghai Electric Power (SEP) is likely to take over K-Electric.
Established in 1913, Karachi Electric Supply Corporation (K.E.S.C.) had an aim to power the city with a port. The corporation was then nationalized by the Government of Pakistan in 1952 to facilitate the much-needed investment in its infrastructure. Decades after the nationalization, the company was again privatized in 2005 with 71% stakes sold to a foreign buyer. Today, the company is managed by Dubai based – Abraaj Group, which took over in 2009.
Current change of management was initiated in October 2016 at a cost of 1.77 billion USD. According to the Chairman of the company, Ikram Sehgal, the updated tariff by the National Electric Power Regulatory Authority (NEPRA) is a noteworthy leap forward in the execution of the business bargain. He added that besides the other trivial issues, there is no other dispute and the Chinese firm will assume control over the company by Sep-Oct 2019. Before the takeover, the company will be filing accounts for the year 2018 and for the rest of the period, by the end of this month at PSX.
K-Electric had a dispute with NEPRA over the revision of the tariff, which ultimately caused delays in the finalization process of the financial statements. The Ministry of Energy then announced the latest tariff in May, which was used by K-E to calculate the sale of power.
K-E recently raised the tariff for consumers using more than 300 units per month. Rs.2.15 were raised for 301 – 700 units slab and Rs.3.37 were raised for above 700 slabs. However, the company stated that consumers using less than 300 units per month would remain unaffected.