Chi­nese in­vest­ment in K-elec­tric

Pakistan Observer - - FRONT PAGE -

Acoun­try’s FTER com­mit­ting about $36b dol­lars in­vest­ment in the

power sec­tor un­der China-Pak­istan Eco­nomic Cor­ri­dor Project, China has come up with an­other sub­stan­tial in­vest­ment by de­cid­ing to pur­chase stakes worth $1.77b in K-elec­tric. Abraaj Group, which cur­rently owns the K-elec­tric an­nounced on Satur­day that the stakes will be sold out to China’s State-backed Shangahi Elec­tric Power. It is hoped the deal, be­ing dubbed as one of the largest pri­vate trans­ac­tions in the coun­try, would not only at­tract more for­eign in­vest­ment in the power sec­tor but also help end woes of the peo­ple of Karachi who are fre­quently ex­posed to pro­longed and unan­nounced out­ages.

K-elec­tric, for­merly known as Karachi Elec­tric Sup­ply Com­pany, was pri­va­tised back in 2005 and later the Abraaj Group took ma­jor­ity stakes of the com­pany in 2009. At the time of its pri­vati­sa­tion it was ex­pected that trans­ac­tion would help steer the com­pany out of huge losses and that the buyer would also in­vest suf­fi­cient amount to en­hance gen­er­a­tion ca­pac­ity to meet the grow­ing power re­quire­ments of the me­trop­o­lis. De­spite the com­mit­ments made in the con­tract, the com­pany’s owner did not ful­fil its obli­ga­tions vis-à-vis en­hanc­ing power gen­er­a­tion and im­prov­ing the trans­mis­sion sys­tem. All this only added to woes of the peo­ple of Karachi who were ex­posed to pro­longed and unan­nounced power out­ages. The com­pany’s fail­ure to gen­er­ate suf­fi­cient en­ergy only forced suc­ces­sive gov­ern­ments to in­ter­vene and sup­ply elec­tric­ity to the com­pany in order to pro­vide some re­lief to peo­ple of Karachi. In our view, divest­ing of ma­jor stakes to Shangahi elec­tric com­pany, which has a vast ex­pe­ri­ence in the en­ergy sec­tor and achieved ma­jor break­throughs in power gen­er­a­tion and trans­mis­sion, would help change the for­tunes of K-elec­tric not only to gen­er­ate ad­e­quate elec­tric­ity for its mil­lions of con­sumers in Karachi but also in­ject ad­di­tional elec­tric­ity to na­tional grid for us­age by peo­ple in other cities as well.

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