ISLAMABAD: A top independent auditing firm has verified K-Electric’s write-off claims, saying they followed international standards and worked fully independently from the company’s management and board.
The National Electric Power Regulatory Authority (NEPRA) on Thursday held a public hearing on K-Electric’s (KE) additional Rs8.131 billion write-off claims, scrutinising the utility’s processes and the independence of its auditors while stakeholders pushed for broader transparency and reform across the power sector.
NEPRA Chairman questioned how the authority could be assured of the complete independence of KE’s auditors. In response, representatives from A.F. Ferguson—an independent audit firm and member of the PwC Network—asserted they had followed rigorous verification procedures. These included on-ground assessments, customer surveys, disconnection status checks, and photographic documentation. The auditors maintained their independence from KE’s management and confirmed adherence to international audit standards.
The write-off claims, submitted in continuation of an earlier case heard in December 2024, pertain to unrecovered dues from chronic defaulters identified afterward. KE explained that despite extensive recovery campaigns, including disconnections and consumer outreach, certain dues remain unrecoverable due to socio-economic challenges in its service areas.
Muhammad Aamir Ghaziani, KE’s Chief Financial Officer, emphasised the utility’s improved recovery mechanisms and pointed to transmission and distribution (T&D) losses dropping from 38% to 15.3%, aligning with NEPRA’s benchmark.
Former Prime Minister Shahid Khaqan Abbasi, who previously headed the PM’s Taskforce on Energy, highlighted that a timely and fair decision on KE’s write-off claims would have broader implications, particularly in boosting investor confidence and supporting the privatisation of distribution companies (DISCOs). He stressed that delayed approvals of prudent costs undermine sectoral credibility and KE’s financial sustainability.
Rehan Javed from the Korangi Association of Trade and Industry (KATI) raised concerns about Karachi’s consumers bearing the Power Holding Limited (PHL) surcharge burden despite KE’s non-involvement in the national circular debt. He warned of potential protests if fairness concerns remain unaddressed.
Multiple stakeholders advocated for the development of a sector-wide write-off framework applicable to all DISCOs, not just KE. Civil society groups and welfare organisations like the Saylani Welfare Trust recognised KE’s recovery challenges and suggested joint recovery task forces to improve on-ground results.
Amina Ahmed, NEPRA’s Member Legal, expressed disapproval over certain political representatives veering off-topic during the hearing, leading to disruptions. However, other participants commended NEPRA for addressing a matter of critical importance and called for similar hearings to investigate DISCOs’ roles in the circular debt crisis.
Energy advisor Omer, along with international consultants, contextualised KE’s write-off requests by citing global practices, noting that 100% recovery in power utilities is rarely feasible, and such write-offs help ensure operational viability rather than reward inefficiency.
NEPRA concluded the hearing, stating that KE’s claims would undergo detailed scrutiny, and a formal determination would be issued after complete evaluation. The outcome is anticipated to serve as a benchmark for future tariff reforms and privatisation drives in Pakistan’s evolving power sector.
