Degree

Master of Business Administration Executive

Faculty / School

School of Business Studies (SBS)

Year of Award

2023

Advisor/Supervisor

Yaseen Ahmed Meenai, Lecturer, Department of Mathematical Sciences

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Executive Summary

This MBA final year project focuses on K-Electric Limited (KEL), the sole licensed electric supply utility company responsible for providing power to the major industrial hub of Karachi, Pakistan. KEL faces challenges in delivering affordable, reliable, and quality services due to the imbalance between supply and demand in the city. With approximately 3.7 million registered consumers, including 1.5% industrial consumers, KEL struggles to optimize its assets, minimize investments, and enhance profitability due to this demand-supply imbalance.

The goal of our research project was to explore how an electric power utility can influence industrial site selection and preferences in Karachi. We conducted surveys with power providers, business professionals, and industrialists and analyzed the interrelationships between a range of factors involved.

Our research findings show that utility suppliers can influence industrial site selection criteria by offering discounted rates to industrial locations using their underutilized assets, while ensuring a return on capital expenditure. Factors such as consumer market, human capital, infrastructure, raw materials, transportation, and utilities also significantly influence the choice of industrial sites. We found correlations between these factors and decision-making aspects, such as cost per unit, connection costs, power quality, power reliability, and future power needs for expansion.

Data analytics revealed that utilities play a crucial role in industrial site selection, alongside factors like workforce, infrastructure, and logistics. The cost per unit appeared to be the most influential factor, followed by reliability. Our study found that KEL's industrial consumers were willing to move their industries to various locations if the power utility offered a 25% discount on tariffs. Our feasibility analysis suggests that the tariff discount by power utility can have diluted effect, considering a particular industrial zone and the resultant optimization in capital expenditures can reach maximum level of profit before tax at 8% in the profit and loss statement, this indicates the importance of site selection and profitability.

Based on our findings, we recommend collaboration between electrical utilities, businesses, and demand managers to select optimal industrial sites in Karachi. The insights from our study can inform decision-making processes for utility companies, industrialists, and governing bodies to drive Karachi's economic development in the coming years.

Pages

viii, 46

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