Former Chairman of the Federal Board of Revenue (FBR), Shabbar Zaidi, has termed NEPRA’s decision regarding K-Electric’s multi-year tariff financially unfeasible, warning that the utility could face bankruptcy within the next two years.
Speaking at a webinar organized by the Policy Research Institute of Market Economy (PRIME), Zaidi said NEPRA’s revised multi-year tariff determination for K-Electric undermines the government’s privatization agenda and poses risks to Karachi’s economic stability.
He criticized NEPRA’s approach of applying a uniform tariff across all cities, saying it ignores ground realities. “A private distribution company cannot disconnect high-loss areas or adjust prices independently,” he noted, adding that comparing Karachi’s consumers with those of other cities is unrealistic.
During the webinar, titled “Karachi’s Energy Security: Challenges and Opportunities,” energy experts also shared their insights. K-Electric CEO Moonis Alvi emphasized that the multi-year tariff should have reflected the company’s operational improvements and the complex urban environment in which it operates.
Alvi highlighted that since privatization, K-Electric has reduced its overall technical and commercial losses from about 45 percent to below 20 percent. “While the new tariff structure presents challenges, K-Electric remains committed to serving Karachi,” he stated.
He explained that changes in the fuel reference mechanism could impose additional financial burdens on Karachi’s consumers, including retrospective adjustments.
“We believe these matters can be resolved through constructive dialogue with NEPRA and the government,” Alvi added, noting that K-Electric’s generation cost remains lower and its efficiency higher than many other distribution companies.
Haroon Shamsi, a Karachi-based industrialist and member of the Better Work Pakistan Steering Committee, said the revised tariff is impractical for industries that rely on affordable and reliable electricity.
He added that since financial year 2024 accounts have already been filed, implementing past adjustments would be difficult.
