The KE impasse


Despite being interested in acquiring majority shares (previously held by Dubai’s Abraaj group) for the last four years, Shanghai Electric Power has yet to make its move. Going by their spokesmen, they were waiting for a resolution of issues related to former receivables/payables of K-Electric. The problematic discourse that hinted at the fast progression of the entity from a profit-making to a loss-making one was also highlighted on television screens as the rationale behind the Chinese change of heart. And they couldn’t really be blamed. For K-E’s never-ending troubles are an open secret. One of the major blows to its financial profitability has been unpaid dues. According to the entity, its receivables have swelled to nearly Rs280 billion, with just tariff differential claims at Rs 220 billion. Meanwhile, assorted federal and provincial entities need to pay the remaining amount.
With the dramatic entry of Saudi investor Abdulaziz H Aljomaiah and his round of allegations against PM’s Advisor (Power) Tabish Gauhar, the plot considerably thickens. If his letter inked to the PM holds any credence, SAPM has catastrophically devastated the takeover prospects of the public body. Why was Mr Gauhar allowed to dip his toes in visibly conflicted waters? Having served as the chief executive officer and chairman of KE, he was bound to be accused of acting out of personal interests. Shaikh Aljoimah seems particularly interested in regaining ground in the corporation that his conglomerate had originally bought in 2005. Notwithstanding the brevity of the trip he took in March, pundits in the power sector hailed the tycoon’s engagements with all bigwigs considerably worthwhile for the KE’s wows, particularly its acquisition impasse. Though he had not then held any punches regarding zero returns in the last 15 years of investing in the utility company, his enthusiasm for future pursuits painted a picture different from the bleak one rolling on our screens. For the last several years, emotions have run high against the country’s only privatised electric distribution company. Day-long blackouts are an oft-experienced tragedy under its administration. In such dark times, any positive sign — no matter how meagre— would surely be celebrated as a godsend. But if those assigned with the task to develop the power sector are the ones rooting for obstructions in its success, there is no undoing the damage wreaked upon its future.
For the umpteenth time, this publication urges the prime minister to take a lont and hard look within and bid adieu to all members of his cabinet with even a shadow of private interest. Whether Mr Gauhar appeared on the media with the best national interests close to his heart is not under purview here. The fact remains that his past affiliations are now being blown out of proportion to set up a tremendous roadblock in the ruling government’s path.
Whatever baggage the Shanghai takeover comes with, Pakistan should be in an upper-hand position to not pursue it because it does not serve its interests. Getting kicked out of a deal because of a personal spat is not the best way to go.