Kunda System in Karachi

Electricity Theft

Energy theft is a world issue and this white collar crime is committed elsewhere irrespective of economic stability of countries. Electricity theft of 6 billion US dollars per year was reported in 2012-13 alone in the US. A business case from a utility in Canada, BC Hydro, claims that electricity theft cost them at least 850 GWh (gigawatt-hours) or approximately US Dollar 100 million per year. In some countries, energy loss due to theft is estimated at over 35%. Legitimate customers bear the cost of electricity theft, which has grown significantly in the recent decades. The rate of stealing electricity is much higher in developing countries like Pakistan.

In 2013 it was placed on record in the Senate of Pakistan, that in the last 5 years Pakistan had lost Rs 90 billion in electricity theft and line losses.

Power supply to Karachi

K-Electric is a successor to KESC which was its original name for more than 70 years and was operating as a vertically integrated power utility in Pakistan. It is thoroughly integrated in generation, transmission and distribution to the whole Karachi city and its surroundings. Earlier to 1990 KESC was enjoying a good reputation. Suddenly it was placed under WAPDA control at that time company’s share with its face value in Pakistan Rupees 10/- was selling at Rs.160/- in stock market. WAPDA was ill-reputed for corruption and mismanagement. Under WAPDA control its share was trading below face value. However KESC was privatized later.

Urbanization without town planning

BBC Delhi correspondent, besides citing different issues, one of the disclosed reasons of electricity theft was that in India poor people buy stolen power because they cannot afford to buy it. In Karachi this reason can also be observed in least developed areas. According to estimates published in 2012-13, there were approximately 483 Katchi Abadies (unauthorized residential colonies) in Karachi prior to 1990, the residents of such localities do not have legal right to have civic facilities and basic living provisions such as electricity/water from government departments. According to Chairman of Standing Committee on Urban Development of the Federation of Pakistan Chamber of Commerce and Industry, now it has grown to over 4,700. This is a main reason, where poor and deprived people are compelled to deal with Kunda Mafia.

Monopoly and international competition

Electricity theft, particularly in Pakistan, can best be evaluated in the finding/study by Thomas B. Smith Department of Social and Behavioral Sciences, Zayed University, Dubai, UAE

Electricity theft in its various forms can be reduced and kept in check only by the strong and assertive action of power sector organizations. The strategy and the action should be based upon a thorough understanding of the specific nature of the theft problem. As prices in poor countries rise to international levels, many consumers are trapped. Their own income is by local standards, perhaps $2 to $5 per day, but their electricity charges are the same as for a customer in Los Angeles who earns $80 per day. Under these conditions, consumers may feel that there is no alternative but to engage in electricity theft or not pay their bills. (Further)The total power sector is difficult to privatize into effective private sector enterprises because transmission and distribution are natural monopolies, and competition is essential to urge businesses to be more efficient.

Kunda as a Temporary solutions

According to disclosing by KESC sources the Daily Times Pakistan writes:

The shops that are within the petrol pump premises have legal connections, meaning that they are within the metered-consumers camp while the remaining are provided with power connections through the kunda system just for Rs 500 per month. More than half of the tyre-puncture shop owners have links with KESC's employees, who ensure that they do not suffer any consequences (alleged the sources). It is further noticed that the utility has often claimed that power shortages are due to many reasons including 35 to 40 percent line losses and 40 percent power consumption that occurs through illegal connections such as more than 200 restaurants that are opened till late at night are among the major consumers of electricity, majority of these restaurants are established on footpaths and link roads that they have encroached. Switching off the lights of these restaurants will save at least 100 MW.

Artificial reasons of theft

Difference in time of load-shedding: A large number of illegal ‘kunda’ connections are overloading the K-Electric. The use of kunda connections not only a cause of financial losses to K-Electric but also the main reason of frequent tripping. Among many other reasons one of the basis of getting electricity through kunda system is access of consumer to a nearby area where timing of two neighborhoods are different for load shedding.

Night Matches Kunda system is also applied in Saturday night matches which is very common in Karachi. They use at least 15-20 of 500-watts bulb rods for lighting a little area of pitch.

More consumption versus higher cost

One of the reasons for electricity theft is that middle class who due to meager resources could not bear to pay the many units consumed at a higher cost on slab to slab increase. The slabs of units consumed and electricity charges are (2015 slabs and rates):

Pakistan Rupees 10.20 per unitfrom 201-300 units Rs.16 per unitfor consumers of 301-700 units Rs.18 per unit (+ General sales tax and other charges)

There is strong basis for charging electricity consumption bill according to affordability of consumers (reasonable tariff for 300-500 units - this step will reduce electricity theft), incompetency of people because of resources can be noticed that even they had given no importance to a religious decree issued in 2009 prohibiting theft of electricity.

Anti-theft measures by Pakistan and K-Electric

In 2014 President of Pakistan has issued an ordinance for defining strict punishments to electricity thieves across the country. The strategy and the action should be based upon a thorough understanding of the specific nature of the theft problem, while implementing the law against electricity thefts so as to technical loss due to pilferage and theft of electricity should not be dealt with combined.

K-Electric has introduced a latest technology which will remove “Kunda system and electricity theft”. Under this program Area Bundle Cable (ABC) System has already been installed in Kiamari area and entire city is to be covered with the new technology of ABC. The system makes it impossible to steal electricity and K-Electric can reduce transmission and distribution loss (T&D loss) remarkably as the ABC project will install special power cables and digital power tariff meters, which are kunda and tampering proof.