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Karachi Electric places $188 mn order for power plant

Karachi Electric places $188 mn order for power plant
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First Published: Tue, Feb 27 2007. 06 24 PM IST
Updated: Tue, Feb 27 2007. 06 24 PM IST
Agencies
Karachi: Karachi Electric Supply Co., which provides power to Pakistan’s largest city, said it placed a $188 million order with a group led by Metka SA to build a power plant, part of a plan to meet demand shortfalls.
The 220 MW plant will be jointly built by three companies, including Athens-based Metka, which makes electromechanical equipment and installs heavy metal structures, the Karachi-based utility said in a statement to the Karachi Stock Exchange on 27 February. Karachi Electric has 1,300 MW of capacity at present.
Karachi Electric, Pakistan’s only privately held utility, needs to add plants, replace decrepit cables and cut power theft to end daily outages. Shortages in Pakistan’s commercial hub of 14 million people, where power demand is growing 7% a year, may hold back the economy’s five-year revival.
Pakistan sold a 73% stake in Karachi Electric for $265 million (Rs1,167 crore) to Hasan Associates and Saudi Arabia’s Al-Jummaih Group in December 2005. Heidelberg-born Frank Scherschmidt, 66, took the helm at Karachi Electric in December after four decades running power stations and utilities in Germany, Australia, South Africa and the Philippines.
Karachi Electric plans to spend Rs12 billion by June to complete a gas-fired plant, the company’s first investment in a power station in more than a decade, Chief Executive Officer Scherschmidt said earlier. The company, which has not made an operating profit in 10 years, will invest a further Rs10 billion to repair idle turbines and improve distribution, he said.
Karachi Electric operates 74% of its installed capacity because of worn-out plants and machinery. The utility buys 45% of its electricity from independent power producers, including Hub Power Co., and from the state-owned Water and Power Development Authority.
The company needs to stem losses arising from outdated meter-reading equipment, poor cabling and defunct transformers, he said. Karachi Electric loses as much as 40% of its revenue because of technical and administrative problems and power theft.
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First Published: Tue, Feb 27 2007. 06 24 PM IST
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