The owner of the Aljomaih Holding Company of Saudi Arabia that had originally bought the Karachi Electricity Supply Corporation, (now called ‘K-Electric’) in 2005, arrived in Pakistan on Monday, Dawn News reported.
Shaikh Abdulaziz Hamad Aljomaih’s visit is aimed at resolving K-Electric’s issues about outstanding dues and new challenges in the wake of the arrest of the Abraaj Capital Chief, Arif Naqvi, in London, for the misappropriation of securities funds.
Sheikh Aljomaih held separate meetings with President Arif Alvi, Prime Minister Imran Khan, the ministers for Finance, Energy, and Privatization, and other stakeholders to resolve the aforementioned issues.
The Aljomaih Group had been investing in K-Electric (KE) for the last 15 years since the latter’s privatization in 2005, and Shaikh Aljomaih had also served as the first Chairman of the KE’s Board of Directors at that time.
The disputes in concern are regarding the power utility’s business relations with the government, the settlement of hefty past payables and receivables, and one of KE’s sales to Shanghai Electric of China.
One of KE’s core problems is its outstanding dues. The National Transmission & Despatch Company (NTDC) and the Sui Southern Gas Company (SSGC) claim that KE owes them Rs. 272 billion on account of previous electricity and gas supplies. These companies are also unwilling to enter into any new supply agreements with KE until these dues are cleared.
On the other hand, KE claims that the government and governmental agencies owe it around Rs. 234 billion, and it expects about Rs. 80 billion of this to be paid in net payments from the public sector.
Early this year, the Supreme Court of Pakistan had declined the federal government’s request to facilitate a settlement of almost Rs. 300 billion worth of financial claims and counter-claims among various public sector entities and KE.
Despite this, government officials are reluctant to step into KE’s controversial issues for fear of the National Accountability Bureau (NAB). This is not only hampering the operational efficiencies of the company which will ultimately impact a huge population in Karachi, but is also hindering KE’s prospective transfer of majority shares to Shanghai Electric.
This situation is also obstructing the signing of fresh agreements for power and gas supply to KE, which could lead to a shortage of between 800 and 900 MW in Karachi this summer.
The Saudi Arabian tycoon has reportedly explained to the authorities that his group’s investment in Pakistan had been driven by strong brotherly relations between the countries.
In an apparent reference to Shanghai Electric, he added it is time for KE to be run by a technical team.