Naveed Ismail, CEO of KESC Pakistan, refuted this story from The Nation and other media outlets in a press conference this morning. His statement is that “he works for a public limited company and his salary will be printed in the annual report. But the reports of the salary are much higher than he actually makes.”

The Nation ran this story this morning and cleared up why KESC can not be trusted. 

The CEO of Karachi Electricity Supply Company (KESC) is being paid in dollars despite serious financial crisis in the organisation, well-informed sources told The Nation here on Wednesday.

The CEO, Naveed Ismail, received his initial pay worth US$ 60,000/-. It is noteworthy that CEO and rest of the 40 senior KESC officials are getting their salaries through A.F Ferguson Audit Company in a bid to dupe the lower staff of the company. Moreover, the total amount being paid to them is Rs. 4.8 million (after conversion into rupees), which is the highest salary of a KESC CEO in the past.

These hefty salaries being offered to the new team KESC management are an extra burden on the company already facing serious financial crisis. The new KESC management had successfully curtailed its above-mentioned liabilities amounting to Rs. 65 billion through negotiations with the government before taking the charge.

On the other hand, the company has transferred the financial burden to the government by not owning the debts.

Sources further revealed that the amount paid to these officials would be around $8.22 million annually. Meanwhile, the demand and supply gap of electricity in the city is still lingering on despite tall claims of the new KESC management. Since the privatisation of the company, no substantial step has been taken with regard to improving the situation.

Meanwhile a KESC official, Qashif Effendi, has strictly rejected the report given above. He said the CEO was getting pay in Pakistani currency adding the total amount would be published in the annual report of the company. He further said that no audit company has been hired for this purpose. “We are the employees of the KESC and are being paid by the company”, he added. On the other hand, the longstanding issue loadshedding still persists in the metropolis and the city is facing 6 to 8 hours long power breakdowns on rotational basis.

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Provided by a contributor to Take Back Pakistan

Recent reports in the western media indicate that Pakistan needs as much as $10 billion to avoid an economic meltdown and Pakistan’s foreign currency reserves are:

• falling fast and if forward liabilities are included, the real reserves may go down to $3 billion. This cannot meet the import bill of one whole month*.
• Out of total reserves of $8.467 billion, the reserves held by the commercial banks stood at $3.461 billion on September 23. From September 22, the reserves fell by around $180 million, as there were no receipts while the government made heavy payments for oil and other imports.
• This week, Moody’s Investors Service lowered Pakistan’s credit outlook to negative due to the risk of “missed repayments” on the nation’s debt.

Pakistan’s “gradual economic decline, which started last year”, alarmed the United States and Britain as they feared that financial chaos could allow terrorists to deepen their roots in the country.

To avoid such an eventuality, they decided to launch a new group of donors.

Read more about our dismal state here: ‘Friends’ unveil initiative to avert collapse: Over $15bn needed

It is interesting to note that former President Musharraf inherited a far more fledgling Pakistan in 1999, a Pakistan which was on the verge of being declared a terrorist, bankrupt and a failed state. Musharraf inherited a Pakistan which had less than a billion dollars as foreign reserves, with an economy the mere size of $75 billion, and with 65% of our GDP used for debt servicing. Although currently our economy is fast deteriorating due to the incompetency of the new regime (who looted Pakistan in the past), the situation in 1999 was FAR WORSE than what it is now.

And despite not receiving the above level of support and commitment from the international community, Musharraf and his team were still able to deliver, with Pakistan’s situation improving prior to September 11, 2001. For example, Pakistan’s foreign reserves had risen up to $3.2 billion by September 10 2001.

To quote Dr.Ishrat Husain:

“In 1999, the ratio of foreign reserves held by India was 40 times that of Pakistan. “By June 2002 this ratio has declined to 8 times while the size of Indian economy is about 6 to 7 times that of Pakistan.”

Dr. Ishrat Husain goes on to say:

“It may be relevant to point out that the biggest quantum jump in our reserves had taken place between July 2000 and June 2001 i.e. well before September 2001. During this one year period the reserves increased by 138 percent to $ 3.1 billion. The rate of increase during July 2001 and June 2002 was 105 percent.”

Consider the improvement of a variety of indicators prior to September 11, 2001. We read:

“While acknowledging the salutary impact of the external account improvement, however, it is worth stressing that the trend improvement was visible well before the seminal September 11 events. Interest rates were already on the way down; foreign currency reserves were edging up; the exchange rate was relatively stable; the inflation downtrend was well defined, and the government’s continuing fiscal discipline and commitment to reforms had already set the stage for the IMF PRGF, and the subsequent re-profiling of external debt. Nonetheless, the pre-existing positive trends did gain invaluable momentum in FY02, post-September 11. However, despite these major positives, the economy was not unscathed in FY02.” Read more »