It’s not enough to just produce and transmit electricity. Large areas like Karachi are an amalgam of communities and ethnicities and urban dynamics. The highest losses occur in the last mile of the journey, where encroachment and unplanned growth spawn electricity theft through kundas. These illegal connections are installed by amateurs in complete disregard of the safety hazards, siphoning electricity that is never paid for.
Part II
It’s not enough to just produce and transmit electricity. Large areas like Karachi are an amalgam of communities and ethnicities and urban dynamics. The highest losses occur in the last mile of the journey, where encroachment and unplanned growth spawn electricity theft through kundas. These illegal connections are installed by amateurs in complete disregard of the safety hazards, siphoning electricity that is never paid for.
“Pakistan’s distribution companies traverse an incredibly difficult terrain. They operate within a strictly regulated environment and cannot influence the prices charged to customers but are obligated to recover payments for 100 per cent of all electricity sold”, shares Sadia Dada, chief distribution and marcomms officer at KE, “So the distribution sector is expected to juggle multiple hats, from being a law enforcer to a recovery agent, to a customer support leader. This unique landscape also presents numerous opportunities to drive customer excellence.”
At the time of privatisation, almost 40 per cent of all electricity dispatched from a power plant was lost to the ether, an unsustainable model. Customers were distrustful and reluctant to pay their bills, creating a double whammy. Not only did the situation require significant investment and improvement in the infrastructure, but it also required novel approaches to enhance governance.
The investment came in the form of Aerial Bundled Cables (ABCs), which span over 40 per cent of the entire distribution network of the company. These insulated cables improve the aesthetic of the locality and prevent electricity theft, saving precious units. Installing smart meters on the citywide PMT network allowed the company to track where each electron was flowing through the ginormous circuit of the city, enabling better demand-supply management.
Today, the losses have been reduced from over 35 per cent to around 15 per cent -- more than half, while the customer base has doubled in the same period. At the time of privatisation, less than 10 per cent of the network was receiving uninterrupted power supply; today, 70 per cent of KE’s network is exempt from loadshedding.
The benefits of investment inputs are also evident on the ground, beyond inner Karachi, not only in terms of the provision of electricity but for resolving complaints as well. Despite the advancements, though, Karachi faces challenges that go beyond complex infrastructure. With the city getting bigger and bigger, not in terms of size but in terms of population, it has particularly become prone to problems like widespread encroachment, where housing developments or informal settlements are built dangerously close to power infrastructure, disregarding safety standards and creating risks of electrocution for residents. These physical challenges, however, are just one part of the larger puzzle in managing Karachi’s power sector.
Electricity theft and non-payment of bills are critical issues not only plaguing Karachi but the entire country. Federal Minister for Energy Sardar Owais Ahmad Laghari has highlighted that electricity theft causes a staggering loss of over Rs600 billion annually across Pakistan. Rising inflation exacerbates the country’s economic struggles, putting immense pressure on households and businesses. These financial strains have led to behavioural challenges, where individuals cannot afford to pay their bills while many resort to illegal connections. High levels of unpaid bills, driven by these socio-economic factors, have directly impacted the city’s power grid operations, meaning high loss areas are created too.
Due to electricity theft in selected pockets of the city, residents in Karachi, much like the rest of Pakistan, also bear the brunt of loadshedding, even when there is sufficient power supply available. Utilities often lack the financial capacity to sustain uninterrupted power in areas plagued by low recoveries and rampant theft, leaving no choice but to implement frustrating power cuts.
To curb the challenge of electricity theft and highlight the consequences of non-payment of bills, Karachi’s power utility actively conducts power theft, anti-encroachment and kunda removal drives in areas where these activities are rampant. In2024, more than 16,000 kunda removal drives have been conducted with over 142,000 kundas removed weighing 210,000 kgs. Conducting these drives is not as straightforward as it may seem, as officials of the electricity distribution company facing resistance from the area residents is a common outcome of such drives. Resistance frequently turns into aggression where officials are manhandled and threatened for their lives as well.
The next seven years rest on a $2 billion investment plan in upgrading the transmission and distribution infrastructure catering to the city’s growth. This will be accompanied by an ambitious Power Acquisition Program to integrate sustainable energy generation into the fleet, aiming for 1300MW of renewable energy.
Protests are just the tip of the iceberg as people take to the streets to demonstrate their frustration against loadshedding but in reality a lot of the area residents coming out to protest have huge sums of pending unpaid electricity bills leaving no choice but connection suspension. This practice is understandably troubling for those who consistently pay their bills on time, as they are forced to endure the consequences of their neighbour’s actions in the form of loadshedding, while getting late for work.
However, there is a silver lining. As per the recently issued loadshed schedule released by K-Electric, timely bill payments and reduced electricity theft have improved power supply in several areas, even exempting some localities from loadshedding entirely. From Millat Nagar in Garden to Gulshan-e-Hadeed Phase 1 Jackson Market, these areas are proof that timely payment of bills and a reduction in electricity theft can result in an uninterrupted supply of electricity. For residents of such areas loadshed exemption comes as an economic respite.
The company conducts regular kunda removal drives every month, attacking illegal connections and safety hazards. At the same time, the customer care centres are directly engaging with their area residents to establish facilitation camps. The intent is to bridge the gap and work together to overcome the challenges. In Gulshan-e-Hadeed, over 27 kunda removal drives were conducted since the start of the year.
K-Electric Spokesperson Imran Rana is optimistic about the situation. He does indicate that continued interest in the sector will not just stem from KE’s performance as the sole privatised utility, but also the enabling environment provided to the sector by prudent regulatory policies and a strengthened legal framework to tackle electricity theft. Until recently, the momentum against theft hinged on a presidential ordinance with a fixed shelf life. Parliamentary oversight could expedite this into a permanent effect, adding wind to the sails.
Despite these challenges, there’s a glimmer of hope on the horizon. Karachi's energy landscape is evolving, with technological advancements aimed at improving efficiency and sustainability. The implementation of Advanced Metering Infrastructure (AMI) and Advanced Distribution Management Systems (ADMS) has greatly optimized grid performance, allowing for more precise load management and improved reliability. Furthermore, the adoption of Supervisory Control and Data Acquisition (SCADA) technology has enhanced real-time monitoring, fault detection, and outage management, significantly improving the quality of supply across the city.
But the real innovation lies at the customer-centric level. Today, 70 per cent of all customers are paying their bills digitally, with no visit to a physical bank. New connection applications can be submitted through the KE Live App and tracked transparently through an end-to-end system. Want your income tax certificate? Use the app. Looking to change the name on your bill? Use the app!
Having invested $4 billion in the entire chain since privatisation, what does the future hold? The next seven years rest on a $2 billion investment plan in upgrading the transmission and distribution infrastructure catering to the city’s growth. This will be accompanied by an ambitious Power Acquisition Program to integrate sustainable energy generation into the fleet, aiming for 1300MW of renewable energy.
Karachi continues to grow, and so do its energy needs. The city’s expansion calls for a more resilient and efficient energy infrastructure. However, the challenges in meeting these needs are immense. It’s a constant tug-of-war between overcoming regulatory, infrastructural, and economic hurdles and capitalising on growth opportunities.
Meanwhile, the power sector landscape is also evolving rapidly. The advent and rapid acceleration of distributed generation with net metering is affecting long-term planning, while the government continues to rattle its mind on ways to contain skyrocketing circular debt, estimated to reach Rs2.8 trillion. An interesting fact is that under privatisation, KE does not have any contribution to circular debt. All losses have been borne by the investor while any profits have been reinvested into the company.
Addressing sectoral inefficiencies requires planned, targeted investment. It also requires a collaborative effort at the government level. The sector’s overall viability rests on policymaking that accounts for ground realities while providing stability. Privatisation tops the agenda, with distribution companies first on the list to bring in performance improvements and achieve a turnaround.
Karachi’s future hinges on its ability to secure stable, sustainable energy sources. With ongoing investments in renewable energy and the adoption of advanced technologies, the city has taken meaningful steps toward meeting its energy demands and improving lives. But further progress will depend on supportive regulatory reforms that recognise the unique challenges of powering one of the world’s largest and most dynamic cities.
Concluded
The writer is a freelance contributor.
