Islamabad: The National Electric Power Regulatory Authority (NEPRA) on Tuesday concluded the public hearing on K-Electric’s (KE) application to write off Rs68 billion of non-recoverable dues accumulated over seven years, from FY17 to FY23.
These claims, which were presented as crucial to KE’s financial sustainability, drew sharp criticism from consumers in Karachi, who expressed concerns about the potential burden on electricity bills.
K-Electric explained that the write-off claims relate to chronic defaulters and are consistent with the multi-year tariff framework given to the utility.
A company spokesman confirmed that these claims are independent of the unified tariff policy that governs electricity prices charged to consumers. “Unlike Distribution Companies (DISCOs), KE, as a private utility, contributes nothing to the national circular debt, a fact recognized by the World Bank and other global institutions,” the spokesperson said. “Rejecting legitimate claims would directly impact KE’s cash flow and hamper infrastructure modernization plans to enhance power supply in Karachi.”
However, consumers who attended the hearing strongly opposed the allegations, arguing that imposing additional financial burdens on electricity users in Karachi under the guise of write-off claims would be unfair and could exacerbate electricity theft.
Many attendees highlighted the adverse economic conditions faced by Karachi residents and businesses. “Electricity costs are already unsustainable, resulting in hundreds of factories closing, with more closures on the horizon,” one consumer said. Another raised concerns over the additional fees for circular debts already imposed on Karachi residents, deeming any additional fees unacceptable.
Furthermore, consumers warned that shifting KE’s financial issues to consumers could lead to social unrest. “Imposing more surcharges will only exacerbate tensions in an already tense environment,” one participant noted. Questions were also raised about the privatization of the Kuwaiti economy in 2005, with consumers saying that the goals of privatization had not yet been achieved. Critics have pointed to KE’s reliance on differential tariff support and unresolved claims as evidence of inefficiency.
Energy expert Rehan Jawad added his voice to the opposition, categorically rejecting any attempt to recover write-off claims by imposing additional fees on electricity bills. “It is the responsibility of the government to address the financial issues in KE without increasing the burden on consumers in Karachi. Treating electricity theft as a crime and implementing measures to recover dues from defaulters should be the focus rather than penalizing paying customers,” Jawad said.
He warned that imposing such additional fees would amount to collective punishment for Karachi residents, who are already under enormous financial pressure. “This would be a classic case of robbing Peter to pay Paul,” he said. Jawad also warned that such a move could lead to serious law and order issues.
In his speech following the hearing, Rehan Javed reiterated that all trade bodies, chambers and associations in Karachi are united in their stand against the additional surcharge. He noted that if NEPRA or the government imposes write-off costs on consumers, peaceful protests and legal action will follow.
Founded in 1913 as Karachi Electric Supply Company (KESC) and privatized in 2005, K-Electric is the only vertically integrated power utility in Pakistan, serving Karachi and its adjoining areas. The company is majority owned by KES Power, a group of international investors, while the Government of Pakistan retains a 24.36% stake.
NEPRA will conduct a comprehensive review of the data submitted by KE before making its decision on the Rs 68 billion write-off claims. The outcome is expected to have far-reaching implications for Karachi’s electricity consumers and for KE’s operational sustainability.