Federal and Provincial Entities Owe K-Electric Rs. 170 Billion

Federal and provincial corporations’ continued failure to pay K-Electric (KE) has resulted in outstanding dues of Rs. 170 billion.

The huge receivables have made the country’s sole vertically integrated power provider financially unviable, and affected its future investment plans, said KE’s Chief Financial Officer (CFO), Muhammad Aamir Ghaziani.
The company has declared an approximate Rs. 2.96 billion loss in FY-2020, primarily due to soaring receivables and higher debt servicing cost.

“Financial viability is critical for continued investment. If KE is rendered financially unviable, sustainable investments may be constrained,” he said.

Responding to a query, he answered that KE’s total receivables from government entities including Karachi Water and Sewerage Board (KW&SB), National Transmission & Despatch Company (NTDC), and Sui Southern Gas Company (SSGC) are close to Rs. 170 billion.


K-Electric Launches Tele-Billing Service

KE owes a principal amount of Rs. 13.7 billion to SSGC while the remaining is markup which is still awaiting final adjudication by the court. He said KE has honored its payment obligations to SSGC, PSO, and IPPs, although it has declared a loss of Rs. 2.96 billion for FY-2020.

He said KE’s net receivables, mainly on account of Tariff Differential Claims and KWSB energy dues, remain unpaid as yet. Linking KWSB’s Rs. 30 billion outstanding payments to this issue, he claimed, “If KWSB dues had been released to KE in time, K-Electric would have been able to ensure timely payments to SSGC.”

“If the long-standing receivables issue continues to remain unresolved, KE’s ability to serve Karachi’s exponentially growing power needs would be constrained with serious implications for citizens and industries in Karachi,” he warned, citing the company’s FY-2020 financial statements.

The financial statements showed that the company had been driven back into financial losses after eight years of profitable operations on account of a 166% increase in financing cost and an exponential surge in borrowing to bridge working capital requirements in the wake of unpaid dues.

He contended that with KE’s 900 MW power plant upcoming and transmission upgrades to evacuate additional power supply from the national grid underway, addressing investment roadblocks including payment delays and pending approvals was a critical pre-requisite.

He stated, “We look forward to working closely with both the federal and provincial government entities for a swift and equitable resolution of these issues so that our vision to move Karachi into a power surplus position may be realized by 2022.”

Regarding the issue, SSGC’s PRO, Safdar, said that KE has to pay around Rs. 116 billion to SSGC, which includes markup amount as well.


SSGC Announces Closing CNG Stations in Sindh on Alternate Days

This issue is long pending, he added. He further told that a meeting between the KE and SSGC officials was held at the Sindh Governor’s House during the tenure of the last PML-N government, wherein it was decided to settle the issue through a third-party audit. SSGC has already shared ToRs with KE in this regard, while the power company has not shared its ToRs with SSGC, he added.

    • Let’s Move on from Pakistan Agar Itna Loses Howa hai
      Par Na KE Jane Mangti hai Na Compitter Ane Deti hai

  • Get Alerts

    Follow ProPakistani to get latest news and updates.

    ProPakistani Community

    Join the groups below to get latest news and updates.