Pakistan: Salary of new KESC CEO up 35%

Source:http://www.factiva.com/ Tabish Gauhar, the new Chief Executive Officer (CEO) of Karachi Electric Supply Company (KESC), will draw Rs1.3 million in monthly pay, 35 per cent more than what his predecessor used to get, an official announcement said on Thursday. Besides this remuneration, the CEO of loss-ridden power utility is also entitled to other contractual benefits including residential accommodation, guards at residence, annual leave, air passage and medical expenses, a KESC notice issued to Karachi Stock Exchange said.

Gauhar, one of company’s board directors, has taken the top managerial seat from Naveed Ismail who resigned on November 2, 2009, after months of fighting severe criticism of his management’s failure in resolving power crisis. The six-foot plus Ismail, whose monthly remuneration was Rs9,57,000, has become part of list of CEOs who have in recent years tried to fix KESC. He is the third CEO to be replaced since KESC was privatised in 2005. For the financial year 2008-09, KESC incurred a loss of Rs15 billion, marginally lower than previous year’s figure. But the accumulated losses have crossed over Rs60bn and the rickety transmission and distribution system is need of massive repair. Ismail’s monthly accommodation benefit was over Rs7,60,000, as per the financial statements of the company. The KESC notification did not say if new CEO will get the same deal. Though the salary of KESC boss is not comparable to what executives get in banks and other financial institutions, politicians will question the justification when the utility is stifling under financial losses and all the company costs add up to power tariff. The resignation of Naveel Ismail came just days after Zafar Aziz Osmani, the human resource guru, stepped down from the post. Qashif Effendi, another important member of the original management team formed soon after Abraaj’s takeover, has already left the organization. This team was put together amid much fanfare. Ismail was the former country head of AES. He boasted wide experience in power sector and had held key position in AES Corporation around the world. He was also President of AES Ekibastuz, a 4,000 MW coal fired power plant in Kazakhstan. Similarly, Effendi is considered a top man in marketing circles of the country and Osmani was also a known HR manager. But the management is crumbling and there is a reason why. “You can’t tell public about your Azm (commitment) towards solving the power crisis every other day when there is no respite in breakdowns,” a person familiar with the managerial matters said. “Cosmetic work won’t help and these career professionals have realized this.” The woes of the KESC and its consumers do not seem to be ending anytime soon. Electricity theft is rampant in Karachi and so far the attempts to curb it have remained futile in most cases. A government, under pressure by World Bank to do away with power subsidies, can no longer afford to resist. The raise in power tariff will reflect in bills of consumers in the city like rest of the country (KESC buys at least 20pc of electricity from WAPDA).