Getting Electricity Survey Pakistan www.doingbusiness.

org

Dear Mr. Akhtar Zaidi,

We would like to thank you for your contribution. Your expertise in the field of getting an electricity connection in Pakistan is essential to the success of the Doing Business report, an annual publication of the World Bank and the IFC that benchmarks business regulations in 183 economies worldwide. The Getting Electricity indicator is one of the 11 indicators of the Doing Business report. The latest edition of the report, Doing Business 2012: Doing Business in a More Transparent World launched on October 20, 2011 and received a record number of 4,432 media citations within one month of publication, including coverage from all major global, regional and local media outlets such as TV, print, broadcast and web. Without your contribution the Doing Business project would not be able to disseminate regulatory best practices to the governments worldwide that read our report with interest every year. Since its inception in 2004, Doing Business has informed more than 300 reforms around the world, making it easier for small and medium sized firms to do business. For Doing Business 2013, we are honored to be able to count on your expertise: Please review the assumptions of the case study before updating last year's information in the survey Please describe in detail any reform that has affected the process of getting an electricity connection since June 1, 2011 Please make sure to update your name and address, so we can mail you a complimentary copy of the report Please kindly return the survey to Susanne Szymanski at sszymanski@worldbank.org Jayashree Srinivasan jsrinivasan1@worldbank.org. We thank you again for your invaluable contribution to the work of the World Bank Group.

Susanne Szymanski Tel: +1 (202) 458-5594 Fax: +1 (202) 473-5758 E-mail: sszymanski@worldbank.org

Jayashree Srinivasan Tel: +1 (202) 458-4224 Email: jsrinivasan1@worldbank.org

The World Bank Group

INTERNATIONAL FINANCE CORPORATION INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION

2121 Pennsylvania Ave. NW Washington, D.C. 20433 U.S.A.

Primary Contributor Information - Please check the box next to information you do not want us to publish. Name Do not publish Title (Mr., Ms., Dr.) First Name Last Name Position (e.g. manager, associate, partner) Profession (e.g. judge, lawyer, architect) Contact details Do not publish Do not publish Do not publish Never Published Do not publish Street Firm name Website E-Mail address Phone Fax Mobile phone Firm Address 7/1-Kh-e-Ban Janbaz, Phase -5, Defence Housing Authority Karachi Zain Consulting akhtar.z@zainconsulting.co m 92 21 585 4110 [ [ [ [ [ [ P.O. Box ] ] ] ] ] ] [ ] Mr. Akhtar Zaidi Director [ [ [ [ [ ] ] ] ] ]

Never Published

92 3008 293 377 [ ]

City Zip/Postal code

[ [

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State/ Province Country

[ Pakistan [

] ]

en a0QC0000003t01tMAA 0038000000gUsDUAA0 a06C000000N6FhlIAF a048000000Bw0SoAAJ a0580000005PhT8AAK PAK

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1. Case study assumptions

The Getting Electricity indicator records all procedures that are required for a business to obtain a permanent electricity connection and supply for a newly constructed warehouse. These procedures include applications and contracts with electricity utilities, all necessary clearances from other agencies and the external and final connection works conducted between the utility s network and the warehouse entry. The warehouse: Is owned by an entrepreneur who is a national of the country. Is located in Karachi. Is located within the official limits of the city where other, similar warehouses are typically located (non-residential area). Is not located in a special economic or investment zone, i.e. the electricity connection is not subject to subsidization or a faster service under a special investment promotion regime. If several options are available in terms of location, we assume that our warehouse chooses the location where electricity is most easily available. Has road access. Works involve crossing of a 10-meter road (excavation, overhead lines, etc.), but they are all carried out in a public land, i.e. there is no crossing into other people's private property. There are no physical constraints in the area where the property is located. For e.g. the warehouse is not near a railway. Is used for storage of refrigerated goods. Is a new construction (i.e., there was no previous construction on the piece of land where it is located). It is being connected to electricity for the first time. Has 2 stories, both above ground, with a total surface of approximately 1,300.6 m2 (14,000 ft2). The plot of land on which it is built is 929 m2 (10,000 ft2). Is a permanent connection. 3-phase, 4-wire Y, 140 kVA (subscribed capacity) (Note: For example, for countries where the voltage is 120/208 V, this means the current would be around 400 Ampere. For a voltage of 230/400 V, the current would be almost 200 Ampere). The length of connection is 150 meters long. Connection is assumed to be made to either the Low-Voltage or MediumVoltage distribution network and either overhead or underground connection, whatever is more common in the country, and the area in question. (Please see a flowchart on the following page for detailed explanation of the possible types of connection). The length of any connection (or part thereof) in the customer s private domain is negligible (e.g. between customer s LV switchboard and meter). Connection involves installation of only one electricity meter. The monthly electricity consumption is 0.07GWh (Gigawatt-hour). The internal wiring is already done until, and including, the customer s service panel/ switchboard and the meter base (in the cases where the meter is connected to the LV side and is located inside or right outside the customer s warehouse).

The power connection:

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2. Data update
2.1 Background information For your convenience, last year s answers are included in this survey. Please note, that they represent a unified answer, based on the answers we received from various contributors. If you feel strongly that the unified answer we report does not reflect the reality in your country, kindly provide us with a clear indication of your disagreement in the subsequent sections. Please update the data in this section and in the following sections, taking into account the assumptions of the case study. Please describe in detail any change to the data and indicate since when the change took effect. We ask you to specify if the data were erroneous ( correction ), or if the change resulted from a modification in practice or by law which occurred after June 1, 2011 ( reform ). Current information If the information is incorrect or has changed, please provide us with updated information and if applicable, date of the change: [ ]

2.1.1 Most likely location of the warehouse in Karachi 2.1.2 Distribution utility that serves the majority of customers in Sindh Industrial Trading Estate (SITE)

Sindh Industrial Trading Estate (SITE) Karachi Electricity Supply Company Ltd

2.2 Type of connection works The answers to the questions in this survey depend on the type of works that are most likely to be carried out to connect the warehouse to electricity in the area of Karachi indicated in the table above. Different possibilities exist: a connection may be done via the Low-Voltage (LV) distribution network or the MediumVoltage (MV) network. The connection might also be done by means of overhead connection lines or underground cables. Please confirm or update last year s response according to the decision tree below. The 3 illustrations below the decision tree depict the various possible options for connection. If you feel two options are equally likely, please indicate both cases. Please base your answers to the survey on the selection you make.

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2.2.1 According to last year s data, the most likely type of works is an overhead connection to MV network. Please confirm or update by ticking the correct choice (in the circles) below. Please note additional comments here. [ ]

Is it likely that installation of a transformer is needed?

Yes; connection is to MV network

No; connection is to LV network No

Will the transformer be installed on customer s land (most common case)? Yes

Is service overhead or underground?

Is service overhead or underground?

Is service overhead or underground?

Overhead Underground

Overhead Underground

Overhead Underground

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2.3. Procedure list Definitions: Time is measured in calendar days and the minimum time for each procedure is 1 day. Time estimates should reflect wait times when no bribes are paid. A procedure is an interaction of the client or their representatives (e.g. electrician, hired electrical contractor/firm) with external parties, including the utility, government agencies, inspectors, and notaries. Procedures sometimes take place simultaneously; when this is the case it will be indicated in the procedure list. Costs are those for the external connection works only and exclude VAT. Costs such as for the internal wiring of the warehouse (until and including the panel/switchboard) are not recorded. In all cases the cost excludes bribes.

Kindly revise the following procedure list for obtaining an electricity connection: Procedure 1 Time Cost Agency Comments Submit application to Karachi Electricity Supply Company (KESCO) and await site inspection 30 calendar days Time update no charge Karachi Electricity Supply Company (KESCO) Cost update Agency update

Application form should be verified by Licensed Electrical Contractor, should be accompanied with Copy of the computerized national identity card (CNIC) of owner, copy of approved building plan, copy of approved layout plan, copy of covering letter of approved layout plan, copy of trade license, list of machinery, equipment, details of chiller units (in case of centrally air conditioned units), passport size photo of applicant, company letter head mentioning name of authorizing person, his CNIC number.

Additional comments: Please indicate whether the changes above are due to: (i.e. modification in practice or by law since June 1, 2011)

Correction (i.e. incorrect data) OR

Reform

Please explain the changes and provide the date(s) of change and legal basis when applicable:

Procedure 2 Time Cost Agency Comments

KESCO conducts site inspection and prepares and sends an estimate of costs 21 calendar day Time update no charge Karachi Electricity Supply Company (KESCO) Cost update Agency update

Additional comments: Please indicate whether the changes above are due to: (i.e. modification in practice or by law since June 1, 2011)

Correction (i.e. incorrect data) OR

Reform

Please explain the changes and provide the date(s) of change and legal basis when applicable: Page 6 of 13

Procedure 3 Time Cost Agency Comments

Obtain an excavation permit at CDGK (City District Government Karachi) and DHA (Defense Housing Authority) 33 calendar days Time update PKR 137,600 [charge for road excavation/Pacca Rs. 4300/running ft (width 2 ft & depth upto 10 ft)] CDGK (City District Government Karachi) and DHA (Defense Housing Authority) The customer obtains an excavation permit. Cost update Agency update

Additional comments: Please indicate whether the changes above are due to: (i.e. modification in practice or by law since June 1, 2011)

Correction (i.e. incorrect data) OR

Reform

Please explain the changes and provide the date(s) of change and legal basis when applicable:

Procedure 4 Time Cost Agency Comments

Electrician obtains wiring test form 1 calendar day no charge [PKR500/- per KW ] Electrical Contractor

Time update Cost update Agency update

Contractor has to collect this test form from the Government (they issue one form per connection application). He only needs to give the address of the property to obtain the form.

Additional comments: Please indicate whether the changes above are due to: (i.e. modification in practice or by law since June 1, 2011)

Correction (i.e. incorrect data) OR

Reform

Please explain the changes and provide the date(s) of change and legal basis when applicable:

Procedure 5 Time Cost

Make payment of estimated amount at the bank counter of KESCO and submits internal wiring test report form to KESCO 1 calendar day Time update PKR 1,045,433 [ (Pole mounted Transformer - PKR 230,000; Poles - PKR 66,000; STructures- PKR 34,500; Hardware- PKR 55,000; Cable (25 meters)PKR 144,000; Meter (CTO) - 55,000; 60% (Labor, Transportation & Supervision cost)- PKR 353,700 . Present Value of lost interest on PKR 230,000 security deposit is PKR 100,932. {Security deposit calculated at PKR 1650/kVA-refunded back to the consumer based on no arrears and disconnection of service}] Karachi Electricity Supply Company (KESCO) Cost update

Agency

Agency update Page 7 of 13

Comments

The payment has to be made by cheque at the Bank counter of the utility. The internal wiring test report form is obtained by the licensed contractor from the Sindh Government and he completes the form testifying that the electrical wiring of the warehouse has been tested and meets the required testing guidelines.

Additional comments: Please indicate whether the changes above are due to: (i.e. modification in practice or by law since June 1, 2011)

Correction (i.e. incorrect data) OR

Reform

Please explain the changes and provide the date(s) of change and legal basis when applicable:

Procedure 6 Time Cost Agency Comments

Await completion of external connection works, meter installation, and electricity from KESCO 120 calendar days Time update no charge Karachi Electricity Supply Company (KESCO) Cost update Agency update

External connection works includes erection of Poles, laying of HT/LT Cables, completion of PMT / Sub Station work and providing connection to the location, meter installation works. Correction (i.e. incorrect data) OR Reform

Additional comments: Please indicate whether the changes above are due to: (i.e. modification in practice or by law since June 1, 2011)

Please explain the changes and provide the date(s) of change and legal basis when applicable:

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2.4 Further details on the security deposit and excavation permit Current information If the information is incorrect or has changed, please provide us with updated information and if applicable, date of the change: 1) Is equal to [ ]. 2) Is returned (when?) [ ]. 3) Is returned with an interest of [ ]. 4) Can be settled with: cash/check, bond, bank guarantee (pick applicable option(s)). [ ]

2.4.1 The security deposit charged for this connection (subscribed capacity: 140 kVA; monthly consumption: 0.07 GWh)

1) Is equal to 210,000 PKR: PKR 1500/kVA, in this case 140 kVA*1,500PKR 2) Is returned at the end of the service 3) Is returned with an interest of 0% 4) The security deposit cannot be settled with a bond. Is this correct? Yes No 1) Excavation permit is required. 2) The permit or clearance is obtained by customer 3) The permit or clearance is obtained at CDGK (City District Government Karachi) and DHA (Defense Housing Authority). 4) The permit or clearance is obtained in 33 days. 5) The permit or clearance costs Cost of excavation permit of 4300 LCU*32 feet (10 meters). The charges of road cutting/way leave approval varies from agency to agency, the rate charged by CDGK/Town Nazim (mayor) is as follows: 1. Katihcha area Rs 105/running ft (width 2 ft & depth upto 10 ft) 2. Footpath Rs. 537/running ft (width 2 ft & depth upto 10 ft) 3. Road/Pacca Rs. 4300/running ft (width 2 ft & depth upto 10 ft) so in this case since it is

2.4.2 Excavation permit or right of way clearance for road crossing in public domain (if needed specifically for obtaining an electricity connection)

Fill out with the information that has changed: 1) An excavation permit or right of way is required.[ ] 2) The permit is obtained by [ ]. 3) The permit is obtained from (please provide agency name) [ ]. 4) The permit is obtained in [ ] calendar days. 5) The permit costs [ ].

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a road crossing the fee is 4,300 LCU*32 feet (10 meters).

Is this correct? Yes No 2.5 Additional procedures: Please specify any new or existing procedures that have not been included in the above list. For these additional procedures, please also give details on the time, cost, and agency. Procedure Time Cost Agency Details [ [ [ [ [ ] ] ] ] ] or a reform ?

Is this additional procedure a correction

Since when has this procedure been in place? Please cite the legal basis and, wherever possible, provide us with a copy of the legal text. [ ] Please indicate the place of this new procedure within the sequence of the procedure list (e.g., between procedures 2 and 3) or describe when it takes place. [ ] Can this procedure take place simultaneously with another procedure? If so, which one(s)? [ ]

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3. Reform update
3.1 Has there been any reform (in practice or in the laws and regulations) related to the process, time and/or cost for obtaining an electricity connection as described above since June 1, 2011? Yes. Please provide details on the reform(s), including the date of the reform s passage and implementation and the specific procedures affected. [ ] No 3.2 Last year, Doing Business recorded the following future reform. : No future reform was recorded. Has this reform been implemented since June 1, 2011? Yes. Please explain. [ ] No 3.3 Are you aware of any such reform that is ongoing or expected prior to June 1, 2012? Yes. Please describe. [ ] No

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4. Additional information
The following questions are part of the research Doing Business conducts. 4.1 Information on new connections 4.1.1 For the type of connection assumed in the procedure list, i.e. an overhead connection to MV network, how does the electricity company or regulator make the currently applicable fee schedule/ structure of charges (connection cost and fees) for new electricity connections available (so that the customer knows what each charge they are paying is for)? (many options may apply) Information is not available to the public Information is available to the public and the fee schedule is a. Obtained only upon request from agency s employee b. Published in law/decree/regulation Please indicate name and date of law [ c. Available in brochures, boards or other public notices at the agency s office d. Available online Please specify website: [ ] e. Other Please explain. [ ]

4.1.2 Please indicate the name of the agency (Karachi Electricity Supply Company Ltd or electricity regulator) that makes the information publicly available and provide a link to the document above or send it as an attachment. [ ] The following questions are intended for utilities and regulatory agencies. Please note that these questions are not part of the ranking; their purpose is only to inform some research. 4.2 Reliability of electricity supply (service interruptions after a connection has been obtained): 4.2.1 Between January 1, 2011 and December 31, 2011, how many total hours of power outages per customer occurred in Karachi: 4.2.1.1 For low-voltage level customers [ ] 4.2.1.2 For medium-voltage level customers [ ] Please provide a link to the relevant statistics document or send it as an attachment.[ ] 4.2.2 What percentage (%) of the total power outages were unscheduled outages? If possible, please provide this/these percentage(s) 4.2.2.1 For low-voltage customers [ ] 4.2.2.2 For medium-voltage customers [ ] 4.2.3 What can you attribute the power outages to? If several of the options below apply, please indicate for each the extent to which it contributes to outages: 4.2.3.1 Generation capacity: Please explain. [ ] 4.2.3.2 Infrastructure/ network (e.g. faulty equipment, old transmission lines): Please explain.[ ] 4.2.3.3 Other (e.g. maintenance, natural disaster): Please provide details: [ ] Notes: 1. If it is not possible to give the total number of hours of outages per customer over the entire period, please provide that number on a weekly or daily basis and indicate the unit: [ ] 2. If data for the time period from January to December 2011 are not available, please provide data for the latest 12-month period available and indicate the time period covered: [ ]

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5. Referrals
Please help us expand our list of contributors by referring us to other experts (such as electrical contractors, construction companies, or lawyers) who can answer the Getting Electricity survey. First name [ [ [ [ ] ] ] ] Last name [ [ [ [ ] ] ] ] Position [ [ [ [ ] ] ] ] Firm [ [ [ [ ] ] ] ] Address [ [ [ [ ] ] ] ] Phone [ [ [ [ ] ] ] ] E-mail [ [ [ [ ] ] ] ]

Thank you very much for completing the survey! We sincerely appreciate your contribution to the Doing Business project. The results will appear in Doing Business 2013 and on our website: http://www.doingbusiness.org. Your work will be gratefully acknowledged in both.

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