Collective punishment: An innovation by KElectric and Tabish Gauhar
The disease introduced by K-Electric has metastasized spreading nationwide with the support of regulators and multilateral donor agencies.
K-Electric, KE, and KESC all refer to the same entity in this post.
Abraaj took over the management of K-Electric in 2009 and instituted the regressive colonial tactic of "collective punishment" to improve collections. It was supposed to be a temporary measure but here we are more, than 10 years later, it has become a permanent feature.
From Dawn on May 16th, 2021.
Punishing entire areas for crime of a few
He tells me the K-Electric carries out loadshedding three times a day in his area for a total of three to four hours. “They (KE) say our area is in their high-loss category because of electricity theft,” he says, adding: “I have to spend around Rs4,000 to Rs5,000 per month on fuel to run the petrol-based generator.”
The area across the main road was lit and I asked him why there was no loadshedding there. “That area was exempted from loadshedding last year. We hope and pray that KE soon separates our connection from a nearby katchi abadi to exempt our area from loadshedding.”
“Not everyone has power back-up with solar (panels) or generators or UPS... many have newborns, sick and elderly people (living) in these houses... I question KE, why do you do this... but they have no heart... they have the worst management,” he says angrily, adding: “They (KE) say my area has many defaulters. But what do us, the bill payers, have to do with that? I’ve told them many times loadshedding is not the solution; your own people give illegal connections, but they never listen.”
It is tragic that the CSR and ESG award-winning entity i.e. KE has no ideas or plans to reform or eliminate this policy. I guess these CSR and ESG awards are shit, awarded to anyone and everyone who buys the table at the awards ceremony, if they don’t account for such injustices. KE is no different from Malik Riaz who displaces people by encroaching on their and then claims brownie points for charity by feeding them at his dastarkhwaan.
KE uses buzzwords as "considerate strategy" or "segmented load shed (SLS)" to minimize the negative connotation of what is effectively "collective punishment".
It is hard to describe the anger I witnessed among the people against KE there, but it seems the utility is neither aware nor interested in listening to the genuine grievances of its consumers.
KE has around 2.5 million consumers and hundreds of thousands of them face loadshedding on a daily basis. But a spokesperson for KE describes the company’s loadshedding policy as a “well-thought-out and considerate strategy for the citizens of Karachi”.
He says: “K-Electric’s Segmented Load Shed (SLS) policy divides feeders based on their loss profile, which is determined by the T&D [transmission and distribution] losses and recovery ratios in any particular area.”
The phenomenon of loadshedding is not new to Karachi. People here used to experience it even before the privatisation of then Karachi Electric Supply Corporation (KESC) in 2005. But earlier it was simply aimed at managing load — to bridge the supply-demand gap through loadshedding — but after privatisation, the incumbent management gave a new meaning to the word “loadshedding”.
It began using it as a tool to punish an entire locality for the crime of power theft by a few. The ruthless policy was adopted over a decade ago and despite all criticism it bore fruit for the company when it reduced its transmission and distribution (T&D) losses and earned profit.
The KE spokesperson says the SLS policy was “so successful in Karachi, in terms of improving financial viability and consumer behaviour that ex-Wapda Discos (distribution companies) have also adopted this model in other parts of the country, and the GoP has formally approved it as part of the National Power Policy 2013”.
We like to talk about Big Data, AI, Data Analytics, modelling, and simulations in conferences and webinars but when it comes to applying it on the ground, the policy is "de maar saarhay chaar": see which PMT/Feeder has the highest losses and collectively punish everyone in that locality with higher load shedding and inflated billing.
Credit to Tabish Gauhar for admitting that despite the fact he introduced it, it was a wrong policy. But the genie is out of the bottle now.
BRR: One of the steps you took in your stint at K Electric was distributed load shedding, which is now being followed around the country. However, the Supreme Court has taken notice of it. What is your view on it?
TG: I was the architect of that policy which then became a national policy. However, I oppose it now. Though it sends the right signal to consumers, it cannot be a permanent policy 10 years later. We all know that it is a form of collective punishment and a clear but temporary policy toolkit for us. I have no hesitation in saying that it cannot be a permanent feature. The distribution companies need to work harder, smarter, and employ technology. Do we have the political will to zero-in on the actual defaulters and thieves? That remains to be tested. I would also say that I’m in favor of revoking this policy.
Tabish Gauhar is not at K-Electric not anymore. The below is from July 2020 K-Electric presentation on Privatization and Turnaround. The current management still swears by collective punishment strategy’s efficacy.
The presentation has a whole slide dedicated to praises of collective punishment aka “Segment Load Shed (SLS)” by IMF, NEPRA, SBP, and Ministry of Water and Power (MoWP). MoWP calls it Equitable Load shedding and asks the public to make a fair judgment about it. The irony.
As IMF, NEPRA, MoWP and SBP are waxing lyrically about it, it is perfectly understandable that this disease has metastasized nationwide.
It was the same last year.
In addition, K-Electric also overcharges the customers in areas where the losses are high. A customer who pays his bill honestly but resides in a high loss area, not only gets pathetic electricity service (frequent and unscheduled load shedding) but also pays higher rates to compensate for the high power theft in the area.
Stories such as these have now become so numerous that they have prompted public statements from officers in the Ombudsman’s office as well as from the power sector regulator’s consumer affairs division.
Those who take the trouble to go to the Ombudsman’s office have a good likelihood of getting relief.
But in all cases that I spoke to, those who approached K-Electric were promptly given the option to pay in nominal instalments and nothing more.
Even those instalments would effectively double or even triple their bills.
There is a pattern underlying many of these complaints. When the bills are examined closely, it appears that the additional charges almost always appear as “arrears”.
This is a category in the bill that appears below the part that reflects the actual power consumed.
Below is a good presentation (highly recommended) by Dr. Erum Haider based on her paper/research Disempowered: Electricity, Citizenship, and Politics of Privatization in South Asia, which gives a complete and unbiased picture of the "collective punishment" regime of KElectric, unlike my post which is a bit biased.
This chart from her presentation shows that the utility bills received by consumers if billed at the stated tariff should be along the trend line. However, the actual billing is at a different rate i.e. some consumers are over billed for line losses, and it is across all income levels i.e. depends on the honesty of the neighbourhood in which the consumer lives.
So if you are living in an area where people steal electricity, tough luck. K-Electric has no plans to change its strategy as it is not facing any pressure from political parties or the regulators or the donor agencies to change its behaviour.
Below is the conclusion slide from Dr. Erum’s presentation. It is about privatization not being a solution to the ills but also hints that the private entities including KElectric have no incentives to change their behaviour.
K-Electric: reforms and political patronage
Dr. Erum suggests in the presentation that MQM and PPP were short-sighted in supporting K-Electric's reforms, though she didn't cover what the reforms were. The below link no longer works, but I had archived it earlier. The reforms that K-Electric instituted:
Who wants to be a millionaire with KESC?
The row between the Karachi Electric Supply Company (KESC) and some 4,500 workers has put Karachi through hell, with the dispute primarily being over the utility of these workers for the company. While KESC Chief Executive Officer (CEO) Tabish Gauhar claimed two days ago in a press conference that the company will make no appointments without merit, Pakistan Today has learnt that a number of senior posts have been awarded to family members of the politically influential as well as to retired intelligence and army officers, with individual salaries running into millions. As many as 750 officers have also been appointed at packages ranging from Rs 150,000 to Rs500, 000.
The majority of these newly-appointed belong to the Muttahida Qaumi Movement (MQM), but a number of senior officers have also been hired at the behest of senior Pakistan People’s Party (PPP) leaders, sources told Pakistan Today. “MQM-backed employees, with the help of their party colleagues, are pressuring people not to strike against power failure,” sources said.
The KESC appointed Asir Manzoor as the group head of Human Resources, with his remuneration package worth Rs 2 million. Before joining the KESC, Manzoor had served in Coca Cola as well as Ittefaq Foundry, which is owned by leaders of the Pakistan Muslim League-Nawaz (PML-N). “Manzoor is responsible for creating a lot of misunderstandings between workers and the company,” sources told Pakistan Today.
Soon after Manzoor was hired, he appointed his brother-in-law, Zarar Nasir Khan, as manger. Within 18 months, Manzoor promoted Khan twice – first as deputy general manager and then as general manager. Khan is now drawing a monthly salary of Rs 500,000 from the KESC.
Muttahida Qaumi Movement (MQM) MNA Khushbakht Shujat got her son, Shahbaz Beg, appointed as Training Director. He is currently drawing a salary of Rs 500,000. Pir Danish, son of senior provincial minister from the PPP Pir Mazharul Haq, is employed in the KESC as Government Affairs Director. He is also drawing Rs 500,000 in salary. Nayyat Hussain, a relative of PPP MNA Sherry Rehman, is working as Technical Group Head, and pocketing Rs 2.5 million every month.
The most interesting appointment made by the company’s management is that of the group head of Industrial Relations: 78-year-old Abdul Gafoor, a retired bank officer, was hired despite being “physically unfit” for the job, sources explained. Ghafoor received Rs 2.5 million in salary.
Asif Hussain, brother of MQM provincial minister Aadil Siddiqi, is serving as the KESC Production Department’s revenue director; he is drawing Rs 700,000 in monthly salary. Abid Hussain, brother of MQM’s parliamentary leader in the Sindh Assembly, Syed Sardar Ahmed, is serving as a project director in the KESC; he pockets Rs 500,000 in salary. Another active worker of the MQM, Abrar Hussain, has been given the slot of Project-2 Director at a monthly salary of Rs 500,000.
Former heads of Inter Service Intelligence (ISI) Karachi and Islamabad, Brig. (retd) Mazhar Ahmed and Brig. (retd) Masood Ahmed, are now working with the KESC as their security chiefs. Both men are drawing a bumper monthly salary of Rs 3 million, with directions to appoint them coming directly from the President’s House, sources alleged.
About 18 retired colonels are working for the company, sources said. “Col (retd) Wahid Asghar, Col (retd) Imran Nadeem Khuwaja, Col (retd) Saqi, Col(retd) Aamir are among the former military men hired in the company. They all are pocketing Rs 500,000 every month,” sources claimed.
Naveed Hussain, a close relative of PML-Q’s MNA Humayun Akhtar, has been drawing Rs 29 lakh salary as Group Head of Recovery.
Tayyab Tareen, a former employee of a beverage company, has been engaged as Finance Group Head on orders issued from the Prime Minister’s House. Tareen belongs to Multan, the home city of Prime Minister Yousaf Raza Gilani.
“While these officers earn millions, the skilled labour that is expected to be laid off earns between Rs 12,000 and Rs 30,000,” sources explained. “According to the agreement signed between the KESC management and the government at the time of privatisation, no downsizing, termination or retrenchment could be undertaken for at least seven years from the date of takeover. The KESC could also not increase tariffs. But the company has violated both these agreements,” sources said.
To summarize, the reforms were
Hire influentials (MQM, PPP, serving and retired ISI and military officers) at high salaries and fire low salaried workers.
Add inflated bills to honest paying consumers for the theft by others
The “considerate strategy” of collective punishment aka “Equitable Load shedding” or “Segmented Load Shed.”