NEPRA’s revised Multi-Year Tariff (MYT) determination for K-Electric puts the government’s privatization agenda at risk, while also adversely affecting Karachi’s stability, stated energy experts and industrialists on Saturday during a webinar organized by the Policy Research Institute of Market Economy (PRIME) titled ‘Karachi’s Energy Security: Challenges and Opportunities’.
K-Electric CEO Moonis Alvi said the MYT should have reflected the company’s continuous operational improvements and the realities of power supply in a complex urban setting, said a press release issued here.
He said that since privatization, K-Electric has significantly reduced aggregate technical and commercial losses from around 45 percent to below 20 percent. He further noted that while the new tariff structure brings certain challenges, KE remains committed to serving Karachi.
He explained that the changes in the fuel reference mechanism may result in additional financial obligations for Karachi consumers, including retrospective adjustments.
“We believe these issues can be addressed through constructive engagement with NEPRA and the government”, he said while also clarifying the fact that in an apple-to-apple comparison with the national grid and XWDISCOS, KE’s cost of generation was lower and the company was more efficient.
Among the panelists was former FBR chairman Shabbar Zaidi who termed NEPRA’s decision financially unviable, predicting that within two years KE could face bankruptcy.
Zaidi added that NEPRA’s approach of enforcing uniform tariffs across all cities ignores ground realities.