Tuesday Sep 22, 2020
ISLAMABAD: K-Electric, in a damning move, has threatened the government of approaching the international arbitrators if National Electric Power Regulatory Authority (Nepra) tries to erode its exclusivity in Karachi – which is due to remain till 2023.
In a letter, written by the Director of KE Board Shan Ashary to Federal Minister for Privatisation Mohammedmian Soomro, the sole power supplier of the metropolis said: “The Nepra’s impending action will jeopardise Shanghai Electric Power’s acquisition, denying Karachi the benefit of a multi-billion-dollar investment programme and a better quality of living for its citizens.”
“Any action that unfairly and unreasonably results in premature termination of KE’s exclusivity will likely deter foreign investors from considering Pakistan as an investment destination in the future,” it added.
The letter was also copied to Prime Minister Imran Khan, Dr Abdul Hafeez Sheikh, Adviser to the Prime Minister on Finance and Revenue Affairs, Asad Umar, Minister for Planning, Development & Special Initiatives, Omar Ayub Khan, Minister for Energy, Nadeem Babar, Special Advisor to the Prime Minister on Petroleum, Shahzad Qasim, Special Advisor to the Prime Minister on Power, Attorney General of Pakistan, Chairman Board of Investment and Registrar, Nepra.
Underscoring that the current NEPRA hearings on KE’s properly granted power distribution exclusivity in Karachi are of great concern for the company, KE urged the federal government to take the necessary measures to address these concerns and ensure that the power distributor and its shareholders’ rights as a critical constituent are respected.
The KE management disclosed in the letter, saying it is informed that, upon the invitation of the Chief Justice of the Supreme Court, in suo moto proceedings, Nepra is considering prematurely terminating our distribution exclusivity in Karachi, which was due to remain in place until 2023.
“This development is extremely concerning as Nepra’s intended early termination of KE’s Distribution License would have disastrous implications,” the report said quoting the letter, adding “it would seriously damage company’s operational performance”.
“It will also severely compromise the value of our investment in Pakistan, which deserves better support in light of the GoP’s stated investment objectives," read the letter.
"In addition, please note that NEPRA’s anticipated action may have already had a negative impact on KE’s ongoing capex initiatives, including a critical 900MW power project. If the financial close on this project is delayed because of NEPRA’s action, we expect a disastrous power situation with severe generation shortfall in Karachi next summer.”