Tuesday, February 24, 2009

KESC to Add 450 Megawatts of Power by September

Feb. 24 (Bloomberg Report) -- Karachi Electric Supply Co. plans to add 450 megawatts of capacity to its network by September, the first expansion in more than a decade that may help to ease outages in Pakistan’s biggest city.

“Of Karachi Electric’s 19 power plants, 13 have outlived their use and the rest we’re keeping going with duct tape,” Chief Executive Officer Naveed Ismail said in an interview in Karachi today. “It’s a disaster waiting to happen. We have to work on the fast track and we have to be very aggressive.”

The addition will boost Karachi Electric’s daily output by 38 percent and reduce outages that hit two-thirds of the city’s 16 million people. The utility produces less power than its installed capacity and loses revenue because of outdated equipment, power theft and decrepit cables.

“There has been no expansion in production capacity and very little decline in transmission losses,” said Farhan Mahmood, research analyst at JS Global Capital Ltd. in Karachi. “The company needs to work on cutting losses and becoming self-reliant in power generation. That will make it an attractive, profit- making company.”

Karachi Electric fell 2.4 percent to 2 rupees at 11:45 a.m. local time on the Karachi Stock Exchange. The shares have declined 7 percent this year.

The utility generates about 1,200 megawatts of electricity every day. Its installed capacity as of June 2008 was 1,739 megawatts, according to the company’s annual report.

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