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Customers at Heart: K-Electric Files a Robust Investment Plan Of PKR 484 Billion For Sustainable Power Supply To Karachi

K-Electric has filed its investment plan FY 2024-2030 for Transmission and Distribution segments. The futuristic plan keeps its customers at the heart of the business and seeks to leverage technology as a mainstay to further improve network reliability for smooth and reliable supply of power, while accelerating Karachi’s development, progress, and sustainability.

The new plan envisages to invest PKR 484 billion in the Transmission and Distribution business with a keen eye on projected growth in power demand, loss reduction initiatives, targeted and technology driven investments in the network for improved reliability and safety, as well as initiatives to enable KE off-take additional power from external sources including the National Grid. The goal at the end is to make power affordable, safe, reliable, and smooth. At the same time, it seeks to invest in climate resilient and environmentally sustainable infrastructure for power supply.

Since privatization, KE has halved its T&D losses, doubled its customer base and power consumption. This was possible due to sustained investments totaling to PKR 474 billion across the value chain. As per NEPRA State of Industry Report, since its privatization in 2005, KE is the most improved distribution company in terms of loss reduction. The new investment plan is designed to further the operational improvements and is aligned with KE’s vision to keep the customer’s interests and needs at the core of the company’s business operations. The previous MYT was an integrated model that together clubbed generation, transmission, and distribution as an integrated model. As the market transforms into an open ecosystem, we look forward to working in this environment to bring the best of our services for our customers.

Localization of energy supply chain

With import restrictions, Pakistan’s import-substituting manufacturing sectors, which are highly dependent on imports for raw materials, are crippling. And one reason is that the country relied on duty covers to let the domestic sectors spur and was never able to create a level playing field in a true sense.

Enhancement in productivity and innovation in processes is the way to go. In many sectors, Pakistan can do away with local production and could rely on imports (such as an automobile). Still, at the same time, the country needs to step up in some sectors with a competitive edge to not only provide for domestic needs but could also export.

One key area is energy, where competitive pricing and sustained and reliable supply is imperative for many other sectors to be competitive. For example, after recent price revisions, higher energy prices are hitting the country’s most prominent exporting sector, the textile sector, badly. And there are many other examples, as many businesses lost their viability at the feasibility stage due to energy pricing and reliability issues.

Here, the critical component is inefficiencies in the transmission and distribution system feeding the circular dent, eventually leading to higher consumer prices. And with curbs on imports, the supply of materials and equipment, which are essential for lowering the T&D losses and streamlining the supply, is hindered too. That is further exacerbating the problem.

In a recent conference, an expert mentioned that Rs470 billion of imported equipment and material has localization potential. This ranges from printed circuit boards to safety harnesses, which must be tapped to improve the energy supply chain. There are incidences where local manufacturing is entering the market, albeit on a limited scale, but it still shows the possibility.

Capturing this potential may be difficult in the current economic conditions, but this is where business groups can play a crucial role in shaping the policies that can channel capital in a targeted manner to spur activity at a grassroots level. These are long-term visions that require stability and clarity to thrive. However, if successful, they can bolster Pakistan’s export potential and make the country self-sufficient.

Distribution companies share their long-term multi-year investment plans, which the regulator approves. This money has to come in to maintain or improve service levels. For example, MEPCO plans to invest Rs 149 billion from FY22 to FY26. KE is currently awaiting approval on the Rs 484 billion plan until FY30.

There are tangible performance improvement targets committed against these investments and active scrutiny on whether the projected funds are deployed. Barring variations in response to external macro factors, these provide a clear horizon.

Future sustainability rests on our ability to create resilient supply chains, foster local growth, and break barriers to collaboration. First, of course, governance frameworks will have to be improved – the task seems futile in the current scenario. But when many are working on addressing or worrying over the immediate issues, we must keep our eyes on the future. Otherwise, we run the risk of being caught in a myopic cycle.

Do Pakistan’s DISCOs set power tariffs?

Power companies in Pakistan are under scrutiny once again as citizens across the country express their bewilderment over high electricity bills. After a considerable backlash on social media, Islamabad Electric Supply Company (IESCO) and Lahore Electric Supply Company (LESCO) issued a statement on their Twitter pages explaining the way that Fuel Charge Adjustments (FCA) are applied to consumer bills.

Both statements attempted to clarify that the role of distribution companies is limited in this respect. However, such statements will do little to pacify the approximately 34 million electricity consumers across Pakistan, who assume that DISCOs are shirking their responsibility. In reality though, it seems that these companies do not have the level of influence in setting electricity rates as the public perceives.

The cost of electricity for consumers across Pakistan is fixed under a uniform slab-wise tariff policy that has been determined by the National Electric Power Regulatory Authority (Nepra) and the government of Pakistan, through the Ministry of Energy Power Division. However, the actual costs of producing electricity are much higher. The difference is subsidised by the government on behalf of consumers, thus preventing any “discrimination”.

Distribution companies are at the mercy of the government to a) determine the amount of subsidy and b) release the amounts owed by the government to distribution companies. The latter is necessary to streamline cash flows. If a company is hypothetically producing electricity at 20 rupees with a promise to receive 10 rupees in subsidy from a third party, but does not receive this money in time, the company is effectively running a “loss” of ten rupees per unit of electricity.

Power companies do not exist in isolation. They have to make payments to fuel suppliers and manage operations. Delays in release of funds creates a precarious situation. This is dangerous because electricity is a fundamental driver of homes, offices, factories and overall economic activity. No distribution company in Pakistan can unilaterally change the cost of electricity being charged to consumers without the approval of the regulatory authority.

On the other hand, global prices of fuel are also increasing to unprecedented levels on the back of various geopolitical and macroeconomic factors. Even the most accurate of projections could not have accounted for the impact of a global pandemic, the war in Ukraine and the rapid depreciation of the rupee against the dollar. Similarly, the non-availability of natural gas and a decreasing share of hydel generation is also driving an uptick in the use of expensive furnace oil and Regasified Liquefied Natural Gas (RLNG), which are both imported fuels.

If SSGC and SNGPL – both state-owned organisations – prioritise the allocation of fuel towards the power sector, the benefit of cheaper fuel can be passed on to a larger segment of the population. The most that the Central Power Purchase Authority (CPPA) can do is to present the monthly data of the cost of fuel they have incurred in producing the required units of electricity on behalf of the distribution companies. Costs over and above the reference prices have been determined by the regulator to be recovered from consumers under Section 31(7) of Nepra Act (XL of 1997).

The alternative would be for the government to absorb these costs as subsidies, which could only be possible if the economic situation of the country was stable enough. Even then, this current situation is untenable. Independent analysis from Arif Habib shows that the cost of electricity production has risen by 160% in just one year, on the back of surging prices of RLNG and furnace oil. This hike is being borne by the consumers as well. Recently, the government of Pakistan announced a relief package on fuel charge adjustments for the month of June, 2022.

The eligibility criterion was established as consumers with sanctioned loads below five kilowatts who had used 300 units or less in the month of June. DISCOs began facilitating customers under the notified instructions but protests arose again across the country over an alleged “skewed” implementation which excluded other consumers. Despite DISCOs issuing an explanation of the modalities through their social media platforms, it was difficult to overcome people’s sentiments over their perceived responsibility in the process.

Another concern is the levying of taxes by the government. Ostensibly, this is a measure to widen the tax net to fulfil the requirements of the IMF, similar to the removal of subsidies on consumer costs of electricity. In this scenario, however, the distribution companies are only facilitators and executors, not the decision-makers. The revised, fixed sales tax regime was introduced across the country under the Finance Act 2022, which was vehemently protested by commercial consumers across Pakistan. The government has since retracted the order and commercial consumers across the country will now be applied a variable sales tax as a percentage of their bills.

Electricity bills up to Rs20,000 will be charged 5%, while consumption above Rs20,000 will be charged 7.5% as a taxable amount. The power sector provides a fundamental service to the country. But the current circumstances reveal that this sector is a delicate house of cards propped up on shaky foundations. The majority of the control – the monopoly of tariff-setting – is retained by the regulator and the government of Pakistan. DISCOs, unfortunately, can only reiterate their limited role. However, they face the agony and wrath of customers, being on the forefront of the electricity supply chain.

Women who are rewiring the system

The hall echoed with the round of applause as Soffia was summoned to the stage. As she stood and walked gracefully towards it, her face glowed with glee as it was indeed a moment of tremendous pride. She had made it among the first 40 Certified Female Electricians of Pakistan under K-Electric’s ‘Roshni Baji’ Community Ambassador Program. She, along with her 39 other colleagues, had technically qualified to enter a sphere that remained male-dominated for decades until that day.

“Before stepping into this profession, electrical work always appeared daunting to me, and I always believed that it was not for women. But now, after becoming a certified electrician, it is all possible,” shared Soffia with a smile, who lives and promotes her services in the vicinity of Malir.

As the world continues to shift towards digitalisation and welcomes new technologies every day, our consumption and reliance on electricity has increased across the globe. This is why there is a growing need for certified electricians around the world, including Pakistan; and they considered relatively better-paid tradespersons. However, there has always been a stereotype attached to this profession that barred women at large from entering it. As a result, women continue to face obstacles while entering this field even in the countries as advanced as the United States, where the percentage of women electricians remains as low as 2.4 per cent. In the United Kingdom, the figure equates to just one per cent of the entire contingent of electricians. While the numbers are painstakingly low even in the most developed economies of the world, the concept of having women in this profession remained unheard of in Pakistan, until recently. Women’s participation in the labour force stands as low as just 23.8 per cent and even lower in the power sector. However, Soffia and her colleagues are changing the dynamics.

After completing their certification that entailed 8,000 hours of training, these female electricians are able to successfully deploy complete internal wiring on a single-phase supply of up to 5kW from the electric utility’s meters to the distribution board of a home. Additionally, they have been trained to calculate the load and energy consumption of appliances, which can be used to ensure that the electricity supply inside homes is safe and reliable. They are also creating awareness on energy conservation practices as well. Along with the aforementioned technical knowledge, these successful applicants have also been trained in self-defence, how to ride and maintain a motorcycle. They are provided with toolboxes that contain all the necessary tools to deal with different kinds of electrical work and get a head start in their journey as electricians.

Through their efforts, these women electricians are not only breaking gender stereotypes but also gaining financial independence by providing a service to the communities, where homes are predominantly occupied by women during the usual work hours of the day.

Shahida, (name concealed to retain privacy), a homemaker living in the vicinity of Malir, praises the concept of women electricians. “Having a female electrician in the neighbourhood is a great convenience. She is easily accessible, affordable, and most importantly, gives women at home this comfort to get work done even during the daytime when the men are usually not present. I have gotten multiple electrical problems resolved through a Roshni Baji in my locality and she handled them without any hassle,” she enthuses.

While commenting on how becoming an electrician has widened her revenue stream, Soffia informs, “I am a single parent of a four-year-old girl, and my parents, especially my paralysed father, mainly depend on me. Due to personal circumstances, I was unable to complete my education and couldn’t appear for my second year’s exam for B.Com. I also had no technical skills. After becoming an electrician, I know I have learned a genuine skill that has not only given me confidence but has also brought me various work opportunities to earn a better living and support my family financially.”

Although, the journey of becoming an electrician for Soffia and her colleagues was not as easy as it sounds, many raised their eyebrows at them before society finally accepted them. “At first, people in communities that I served were quite sceptical of women in this profession. They did not even believe that I could help them. However, with time and compassion, I was able to win their hearts. Now, wherever I go as part of my work, I am treated with tremendous respect and admiration,” narrates Soffia.

Soffia is also convinced that beyond the preconceived notion of masculinity associated with this profession, it is an easily doable job for women and believes more and more women should be made aware of it through the power of communication. “I believe the information about women electrician programme should spread far and wide. I am currently running a page on Instagram to promote my learnings as an electrician and intend to create a similar page on YouTube as well, to let other women know that dealing with electrical work is not as hard as it seems. If I can do it, other women can do too.”

Becoming professional electricians, these women have not only found it monetarily rewarding but they have also started to feel self-sufficient. “Among many work projects that I am receiving these days, the one that I recently completed was at my own mother’s shop. She runs a small shop that required a complete renovation of electrical installations, which I did myself. I am glad that I was able to support my mother without the need for any external help. It was a moment of ultimate satisfaction for me”.

“Every work sounds difficult unless you do it with passion”, says Shumaila Shahid, another certified female electrician under the Roshni Baji Community Ambassador Program. Living and working in Taiser Town, Shumaila is a Graduate and has worked in different professions before but now she has found her real passion in the electrical field. “I have a diverse experience of working as an administrator in schools, a receptionist in a hospital, and a finance assistant in a private organisation. But the joy of being self-employed and creating a difference in the society are a couple of reasons that drove my passion to be among the first female electricians in Pakistan,” tells Shumaila.

While highlighting her experience in this field so far, Shumaila elucidates, “Even though, I feel blessed as my entire family including my husband supported me with my decision of becoming an electrician, I was hesitant at first. But later on, I realised that majority of the people already recognise me in the area where I work and are quite welcoming. All in all, my experience has been very smooth so far, and I am quite satisfied in this field. I will continue to grow in it.”

Even though this initiative of the Female Electricians Program is led by K-Electric, the major chunk of credit goes to National Electricity Power Regulatory Authority (NEPRA), under which the vision of diversity and inclusion, organisations in the power sector continue to undertake such bold initiatives. Along with regulating the industry, the Authority is promoting the inclusion of women in the power sector as an added objective. During the graduation ceremony of female electricians, Chairman NEPRA, Mr Tauseef H. Farooqi said that the Authority is persistently working to ensure better women representation at all levels within the sector. Apart from ensuring compliance by regulated organisations on all aspects, they have a special focus on health, safety and Customer Social Responsibility, which the Regulatory Authority promotes as ‘Power with Safety’ and ‘Power with Prosperity’ respectively. He had further said that around the world, women’s participation in careers associated with the energy and power sector remains painstakingly low, and NEPRA is making efforts to change that within Pakistan to further strengthen its image in the world.

On the face of it, this entire model appears to be easily adaptable for other Distribution Companies (DISCOs) as well. It is also a good sign that Mr Tauseef Farooqi and members of the Authority see the Roshni Baji Program as a pilot project and envision to expand it to other parts of the country. If other companies operating in the power sector also launch similar initiatives, we will be seeing more and more women making their way to various such non-traditional roles in all parts of the country.

As these amazing women delve into their careers, we can finally see the light at the end of the tunnel. With their courage and confidence, they serve as role models for other women who are looking for different opportunities. If women are consistently provided with an encouraging environment, their success can serve as a catalyst for increased participation of women in careers related to Science, Technology, Engineering, and Mathematics (STEM).

The second amendment and its impact on religious harmony

Her argument, one that I support, is even though Pakistan’s constitution says that Ahmedis are non-Muslims, it does not necessarily mean citizens have to do the same. Why then, are citizens required to fill out a highly discriminatory section within the passport application form?

Ahmedis have continuously been under threat in Pakistan since the second amendment was passed in 1974. They face trouble when it comes to acquiring passports and other documents related to identification. Furthermore to hold any governmental office they are supposed to condemn Mirza Ghulam Ahmad- the founder of the Ahmadiyya sect. In addition, they are prohibited from calling themselves Muslims and not allowed to call their place of worship a mosque nor are they allowed to say the first kalma.

The anti-Ahmadi influence within Pakistani culture is heavily supported by the legislation, which leads to them being rejected by a majority of the Muslim population. Ahmadis not only face cultural isolation but they are also vulnerable to extremist violence. For example, in addition to many Ahmadis being prosecuted regularly, their mosques in Faisalabad have been attacked in 2018. The most recent attack was earlier this year which left many people dead and injured.

Unfortunately, Pakistan’s growing religious polarity and lack of tolerance towards other existing sects and religions has no doubt made the environment around here severely dangerous. Many people, even Sunni Muslims who are perhaps the most protected community in the country are fleeing to other parts of the world in order to build a freer life for themselves.

Sumbul has so far been made to run in circles and no positive outcome has come out of her stand till now. Her passport renewal fee was refunded and she was advised to send her passport to Islamabad. She has written necessary emails and we can only hope that she is able to pull something that is not entirely impossible but quite a feat regardless, to get a passport without signing the declaration. It has been done before just last year, with another citizen successfully getting the section cut off from her application before she signed it.

In order to prevent the image of Pakistan from being tainted, our government needs to address unfair and discriminatory conditions put on Pakistan’s minority groups while making sure that all of its citizens are treated equally. Pakistan needs to ensure that people are given the freedom to practice their religion, as the Constitution of Pakistan also promises in Article 20. Not only will such moves help our minorities breathe easier but it may also help us gain more respect in he international community.