KARACHI: The integrated multi-year tariff determination is not only against long-term public interest but also discourages investors, said a Karachi Electric statement on Tuesday. The statement came after the National Electric Power Regulatory Authority (NEPRA) on March 20 issued the integrated multi-year tariff of the power utility for a period of seven year (201-23). It says that the current determination includes no incentive to continue to invest in improving power supply to the people of Karachi and creates significant uncertainty around current and future projects – which will lead to widening the demand supply gap “The conditions outlined in the determination will result in cash flow constraints that will affect the overall sustainability of KE’s existing operations,” the statement said, and added that some of the assumptions in the tariff determination were not reflective of ground realities. “For instance, the expectation of 100% recovery and the conditions set forth to ascertain bad debts are not realistic. This assumption, earlier applied by NEPRA to distribution companies (DISCOs) across Pakistan, has already been challenged in courts of law across the country.” It added, “It may be noted that KE had only become a viable entity after 17 years of heavy losses due to significant investment made by the company supported by the previous performance-based tariff structure which was positive for both the consumers and the company. The previous multi-year tariff was a performance-based tariff model, which encouraged the power utility to reduce losses and improve its supply and services to the population it serves.”