KARACHI, April 6: In line with its vision to continuously improve its service and transform KESC into a dynamic public utility, Karachi Electric Supply Company has invited expression of interest (EOI), to form strategic partnerships with interested parties across 11 of its business centers. These alliances would be through Distribution Franchise Agreements (DFAs) for 11 of KESC’s business centres located in various areas of the city. KESC believes that these strategic partnerships would foster closer ties and contacts with various communities and help it improve its performance and quality of service to its customers. This innovative approach would combine local knowledge and best practices to bring about a pleasant and much desired improvement in the service delivery capability of the company.
KESC has a total of 28 business centers, of which 17 have Aggregate Technical & Commercial (AT&C) losses of around 20% with a load shedding range of 0-3 hours. In the remaining 11 business centres, the AT&C losses are around 60% and hence being subjected to 4.5-7.5 hours of load shedding. To improve the quality of power supply and to reduce the load shed duration in these 11 business centres, the AT&C losses need to be drastically reduced so that KESC can purchase the additional fuel needed to reduce the load shedding duration. This is a win-win proposition for the registered customers, Distribution Franchisee, and KESC that would enhance KESC’s ability to serve its customers better and offer reasonable rewards to its partners for the improvements that they would bring about. The business centres being considered for DFA are Baldia, Lyari, Orangi-I, Orangi-II, Liaquatabad, Nazimabad, Surjani, Gadap, Malir, Landhi and Korangi. The strategic partners, with area-centric expertise, access and know-how will create greater value for all stakeholders, specially KESC customers. This is an unprecedented opportunity for capable and strategically aligned parties to help drive positive change across Karachi’s power supply network while earning adequate returns, based on a financial improvement sharing model with minimal investment.
The loss reduction / performance improvement sharing model would be structured on the principle that KESC needs to reduce its cash losses and reach a breakeven state (to cover the cost of fuel & power purchase) at the earliest. The Franchisee will share in the improvements and, post breakeven state, retain the majority of the net cash improvement. The tariff mechanism and structure will be the same as it is for all customers in the city, and as determined by NEPRA and notified by the Government from time to time. The DFA would be established for an initial period of 10 years. KESC believes that this arrangement would be a major step toward sustainable development that would have a profound positive impact on key social and economic development indicators.
The Distribution Franchise Partner would be primarily responsible for commercial and routine operational activities in the franchised area such as, meter reading, billing, bill distribution, revenue collection, resolving consumer complaints and Low Tension (0.4kV) network maintenance. The most attractive feature of this proposition is that the Franchisee will have access, at no cost, to all existing systems and resources of KESC, based on certain terms and conditions of the contract. Franchisee will have the use of KESC employees that will be seconded for the period of the contract at no cost to the franchisee. These employees will remain on KESC’s payroll per KESC’s terms of employment. The employees that the Franchisee do not wish to retain would be transferred within KESC. The cost of any additional new non-KESC person would be borne by the Franchisee.
This strategic partnership will support KESC in transforming these areas into sustainable business centers which will benefit all registered customers of KESC. KESC would have its own mechanism and monitoring system in place to track and control the performance of these franchisees across all key performance indicators including, but not restricted to, customer service and satisfaction, better turnaround times in managing customer complaints and reduction in load shedding through improvement in financial indicators.
KESC has advised interested parties to contact at for further information and guidance.