Noaman G. Ali reporting from Karachi, Pakistan.
Karachi has an electricity problem.
Just ask Abid Hussain, a rickshaw driver who lives in Lyari Basti.
“We have to get our electricity from a kunda [illegal connection],” Hussain explains. “There are thousands and thousands of wires. We have no idea which one is ours. If one breaks,it takes four days to figure that out, and then we have to pay two or three thousand rupees for anew one.”
The basti is about as far north as you can get in Karachi—it’s closer to Hub Chowki in the neighbouring Balochistan than it is to affluent Clifton Beach in Karachi’s south.
Lyari Basti is named after the Lyari Expressway—not the famed Lyari river—whose construction displaced thousands of poor people. Five years ago, when various levels of government resettled the displaced at the basti, they promised to provide infrastructure forelectricity, water and gas.
“They said they’d do everything, but they’ve done nothing.”
Abid Hussain is a bit animated as he tells me about Sector 51’s problems. I’d probably be animated too if I went without a proper supply of electricity, water, or gas for five years.
If I am animated, though, it’s because I’m unused to sitting on the ground, on mats laid out overthe humble, dusty floor of friend and fellow rickshaw driver Abdur Rahim Ahmadani’s house.
Officially powered by the Karachi Electric Supply Company (KESC), there’s a fan blowing in my direction. At least, until the load shedding begins.
This typically hot and humid summer has seen several protests across Karachi due to extensive load shedding, and, in many cases, total absence of electricity for hours and even days on end. This is compounded by lack of water supply, especially in poorer neighbourhoods, where people cannot afford generators or UPS batteries as backups.
In the midst of all this, several hundred KESC workers are camped outside the company’s head office in the affluent Defence area. Representing 4,500 workers made redundant by management, their story is hardly straightforward.
More than typical management dysfunction, this is a conflict between two different views of the way the world is, and the way the world ought to be. It is a reflection of the deep and entrenched inequality that characterizes Pakistan, and the ways in which Karachi has been caught up in the global capitalist system’s drive to scale back the gains of earlier generations of working masses.
The Story so Far
“This company is being run by 17,000 people,” explains Asir Manzur, Human Resources Group Head at KESC—one of its senior managers. “A company of this kilowattage should easily run with 8,000 people, given the archaic system of distribution and other difficulties we run into inKarachi.”
“Any jobs not connected with core functions of generation, transmission and distribution arenon-core jobs. These positions are outsourced in the modern world. It is more efficient and more cost-effective.”
As a result, the jobs of 4,500 workers were made redundant. “We explained the reasons to them till the cows came home, but they weren’t willing to listen!” Manzur exclaims.
In late December, 2010, management offered what he claims was a generous “voluntary separation scheme” (VSS), but only about 400 workers accepted. The rest chose not to.
“The VSS was not ‘voluntary,’ it was compulsory,” counters Hayat Baloch, Deputy Secretaryof the KESC Labour Union. “At midnight on January 19, whoever did not avail the VSS was retrenched. If it was voluntary, why terminate the rest?”
The workers protested and as a result various levels of government intervened. KESC took theworkers back on January 24. Management almost immediately declared them surplus workers.
Manzur explains, “They are still on the payroll, they are still getting the benefit of medical and everything else, but they will not be given work because the work has been outsourced.”
But the workers say they haven’t been paid for two months.
Javed Abbasi, a KESC lineman who started out thirty years ago with a montly salary of Rs.1,200, says he actually worked for all of April, including overtime. But he only got paid Rs.3,000 of his now-Rs. 30,000 salary. “That’s not even enough for my family’s milk costs.”
“It is absolutely correct that they have not gotten salary for one month, and the second month,yes, they will not get paid,” exclaims Manzur. “The basic concept is: no work, no pay.”
To sort this out: Management does not want to pay the workers, because they are not working.They are not working, because management does not want them to work. Management does notwant them to work, because it does not want to pay them.
Or, well, it would have paid them for milling about doing nothing. “From January 24 to May 30,the workers were coming to the offices, they were being marked present, and they were sittingout there,” Manzur says. “The apple cart only got upset when they went out on the street and started demonstrating, theywere not showing up for attendance, as per the norms of our policy. We’re not going to pay youfor demonstrating against us.”
But that’s not the whole story. “On April 13, management put out a circular that the posts of these 4,500 were abolished,” explains Lateef Mughal, General Secretary of the People’s Workers Union. “We tried to speak with them, but they refused. We thought, they’ve abolished our posts, they’vealready outsourced our jobs, so how long will they keep us?”
So the workers started a sit-in outside the Karachi Press Club on April 29 (not May 30).Many also started a hunger strike that lasted 22 days, until Abdul Sattar Edhi, Pakistan’s mostrespected philanthropist, requested them to end it and take on management directly.
After a successful general strike that just about shut down Karachi in May, the workers relocatedtheir sit-in on June 19 to outside the head office of KESC, where they are still encamped.
Workers alleged that management has been leveling charge sheets since January in order togradually expel them. “They put out charge sheets for two hundred employees, claiming thatthey were stealing electricity,” Mughal says. “Why would we steal electricity? We get it for free.”
The union claims that 300-400 workers have already been fired in this way.
Indeed, management recently fired the Chairperson of the KESC Labour Union, Akhlaque Ahmed, on the basis of a charge sheet. Manzur confirms it, “We asked him to present his prettyface to a commission, and he chose not to, and when he refused to show up, he was tried ex parteand fired, as per the Industrial Relations Ordinance of 1969!”
(The IRO was, of course, imposed by a military dictator losing his grip on the country in the faceof concerted working class action.)
Ahmed was charged with participation in alleged sabotage. KESC spokesperson Amin urRehman sends me an 18-page document full of allegations of sabotage against KESC facilities by “union miscreants.”
The union categorically rejects claims of violence and sabotage. Instead, Mughal accuses management of trying to buy Karachi journalists by sending a group of them to Dubai on an all-expenses paid trip about two months ago.
Sources in Karachi Press Club confirmed that a group of journalists was taken to Dubai onKESC’s tab about two months ago.
“They were getting educated on the business of Abraaj Capital, the genesis of Abraaj, what kindof business interests we have,” manager Manzur responds. “They were also trained in international journalism, which is value added to their skillset. Beinggood corporate citizens, it was an initiative that we undertook. We engage in a lot of corporate social responsibility.
“Why not ask us about the contributions we made after the floods in Sindh?”
Privatizing social responsibility
Abraaj Capital is the U.A.E.-based private equity firm that has a controlling interest in KESC. Founded in 1913 by private British colonizing investors, KESC was nationalized by Pakistan’s independent and non-aligned government in 1952.
It was privatized again in late 2005 under the military dictatorship of General Pervez Musharraf,and this move is what lies at the heart of the current dispute.
The logic went that the private sector could do just about everything better than the public sector. Navigating the vagaries of the free market, private management would run a profitable operation,and the government would no longer have to keep subsidizing this losing behemoth.
“Privatization was done on the conditions that there would be, one, no more governmentsubsidies, two, increasing in foreign-direct investment, three, new generation created, four, anend to load shedding, five, no workers retrenched for seven years, and six, no increases in tariffsfor seven years,” claims unionist Mughal. “None of those conditions have been fulfilled.”
Although KESC has invested in new plants and upgraded facilities, its own annual report for2010 shows that KESC’s generation of electricity declined from a peak of 9.304 billion kWh in2004-05 to 7.964 billion kWh in 2009-10, comparable to generation figures ten years ago.
“No, it has not,” says Manzur, contradicting the annual report. “The only way it could have declined is when we do not get enough fuel to fire our entire production machinery.”
And thus begins a rapid fire comedy of errors (a tragedy, more aptly).
Manzur explains that KESC does not get enough gas from its sole supplier, the Sui SouthernGas Company, and furnace oil is too expensive for it to purchase, as it lacks the necessary hardcash. “The fault lies somewhere else, it is very conveniently put on the shoulders of KESC.”
Moreover, Manzur explains, KESC’s biggest defaulter is the government. “The governmentowes us Rs. 41 billion.”
Comically, that’s almost the same amount KESC received over 2010-11 in subsidies (Rs. 46billion). “Those don’t go to us, those are passed on to the consumer.”
Why not cut off government electricity supply? “We tried that, and the [paramilitary] Rangers threw up theirarms, the police came into action, and they said this is the city of Karachi, you can’t do this inthe current precarious law-and-order situation.”
The Government of Pakistan issued a directive to not cut off supply.
What about getting rid of illegal connections, the kundas? “You try doing that, and come backand tell me what happens,” Manzur says.
I laugh, “It’s not my job, I’m not running KESC!”
“There was a huge uproar. Even to do a small portion of the city, you get a huge uproar from thepoliticos—there are vested interests.”
What about the fuel adjustment charges, the bogus billing and inflated billing Karachi citizenscomplain about? “That’s not us, that’s NEPRA.”
At this point I am wondering if KESC management takes responsibility for anything. No wonderKarachi’s citizens are exasperated.
“This is the City of Karachi,” explains Manzur. “There are too many variables in the equation. Ifyou were to correct one, the other goes out of wack.”
And herein lies the rub. There’s a yawning gap between the expectations of the proponents ofprivatization and the reality of Karachi.
Neoclassical economics assumes rational, self-interested, disconnected individuals collidingagainst each other in myriad interactions, building up to an equilibrium in a free market. One can talk of families and firms as collectivities (that, moreover, act like individuals), but that’s about it.
Somehow, the theorists forgot to include guns, mafias, collective action or the very lack ofmarket infrastructure in their models—or, for that matter, monopolies, the very opposite of free and competitive markets.
KESC itself is a monopoly, with exclusive franchise to distribute power in Karachi. Consumerscannot get their electricity from anywhere else—except generators.
In the fairy tale worlds of neoclassical economics and MBA programs, where A leads to B, andB to C, and so on, privatization of everything under the sun might make sense.
But this is Karachi. Fairy tales are few and far in between.
Except, of course, where remuneration of executives is concerned.
“A teller in the bank starts at about Rs. 25,000, whereas the president of the bank earns morethan Rs. 6 million a month. That is the market. Unfortunately or fortunately, that’s the way thecookie crumbles,” Manzur says, responding to claims of excessive executive remuneration atKESC. “That’s the market rate, and the value of the skill set.”
But that doesn’t apply to humble workers at the bottom of the food chain, “The salary paid for a driver was up to 48,000 rupees a month, the outsourced guy costs 12,000 rupees.” Won’t thiskind of outsourcing lead to a race to the bottom? “That’s not our responsibility, we are running a business,” he says.
“We are a private company, but we are in a public role,” he mentions at one point. But it’s not clear how they are serving the public. Do businesses exist to serve the public, or do publics exist to serve businesses?
Union leader Mughal’s attitude is the complete opposite of Manzur’s, even if just in rhetoric, “We are fighting not just for our own livelihoods, we’re fighting for all of the citizensof Karachi—for an end to load shedding, an end to tariffs, an end to bogus billing.”
He talks about how the GDP has been affected negatively due to a lack of consistent supply of energy, about industries shutting down, about unemployment, about students not being able to prepare for their exams.
Responding to allegations of union sabotage or union strikes, he points out, “The people of Karachi are burdened already with load-shedding. We’re citizens, too. So we’ve not gone toward shutting down electricity.”
He warns that if things become desperate, it may go that way. “We can stop it. We have that capability. We can stop it whenever we want.”
Putting it all together
I met with Manzur in a private (and air-conditioned) sports and recreation club in Clifton. It’s so exclusive that the guards wouldn’t let me in because my sandals didn’t have ankle-straps.
According to spokesperson Rehman, KESC’s management has to operate off premises when itreceives reports from police or internal security that the situation at the head office is threatening. Indeed, he described the head office as being “under siege.”
I visited that entirely peaceful “siege” a couple of days earlier, where I met with workers sitting on cheap green mats under flimsy tents. There, once again animated because unused to sitting onthe ground, I spoke to 29-year old Mohammed Arif.
A lineman who has worked with KESC for nine years, Arif earned Rs. 15,000 a month. He started out earning Rs. 5,000—he got his job because his father died working for KESC, and he gets a pension as a result.
He lives in Karachi’s humble Baldia Town, and is the eldest in his family, taking care of hiswife, his eight month old daughter, his elderly mother, and his eight younger brothers and sisters—three of whom are still in school, and only one of whom works, doing day labour.
He has no car, he has no motorcycle, he gets around by bus. His younger siblings have not yetbeen kicked out of school, though he hasn’t paid fees for two months, due to the kindness of school officials. But time is running out.
And despite all of that, when I ask him if he has any last words for the interview, he thinks not only of himself, but of himself as part of a larger collectivity:
“I only have this to say: please nationalize KESC. This is in our best interests, and in the best interests of all the citizens of Karachi.”