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ISLAMABAD: Amid rising temperature and electricity shortage in Karachi, the Sui Southern Gas Company Limited (SSGC) has made a conditional offer to K-Electric for increase in gas supply to augment power generation during the ongoing Pakistan-West Indies T20 cricket series.

According to the SSGC, K-Ele­­c­­tric has to settle arr­ears to the tune of Rs80 billion.

“Gas supply to KE can be increased to some extent for four days only for cricket matches at Karachi subject to assurance that you will direct K-Electric to come to the table for signing the GSA (gas supply agreement), payment of security deposit and clearance of outstanding dues,” wrote the SSGC to the commissioner of Karachi.

The offer appears to have been rejected by KE which said it faced a shortfall of 500MW due to gas constraints, but could not take decisions on sub judice matters i.e. the payment of Rs80bn arrears.

The Sindh chief minister had sought intervention of the prime minister in the matter, while the Karachi commissioner had asked the gas company, at the request of KE, to increase gas supply from 90 million cubic feet per day (mmcfd) to at least 166mmcfd for power generation in view of the cricket series, heatwave and examinations at educational institutions.

Insiders said that besides its own gas constraints, the SSGC was sensitive to any ‘irregular gas supply’ because of ongoing examination of its record by the country’s accountability apparatus and wanted to secure its side and reduce outstanding liabilities in case of KE’s transfer to Shanghai Electric Power Limited (SEPL) of China from the current management of Abraaj Capital.

The federal government decided last week to issue a national security certificate for the sale of shares held by KES Power Ltd in K-Electric Ltd (KEL) to the SEPL.

The SSGC said it was facing continuous shortage of gas due to depletion of reservoirs at different gas fields as well as the increasing demand, particularly in the domestic sector. In addition, the gas company said it had started supplying 20mmcfd gas to Sindh Nooriabad Power Company from this financial year as per the gas sale agreement.

“Day by day the gap between demand and supply of gas is widening and currently the company is facing the shortage of 250mmcfd gas,” the SSGC said, adding that the latest situation had been brought to the knowledge of KE time and again that the SSGC was solely dependent on the indigenous gas and its production was beyond control as the gas volume received was provided to end users.

The SSGC alleged that KE defaulted in payments of bills and resultantly overdues reached Rs79.82bn, including late payment surcharge of Rs48.7bn, and “despite repeated efforts and reminders failed to sign any GSA beyond 10mmcfd”.

KE’s spokesman Fakhar Ahmad claimed that the power utility never defaulted in payment of its current gas bills in the past five years. He said the old outstanding gas bills were only Rs13.7bn, while the remaining Rs66bn amount was ‘usury’ and stood challenged in the court of law.

“How can we discuss an amount which is sub judice,” he said, adding that KE had been repeatedly asking for the GSA, but the gas company was not ready until disputed and outstanding arrears were cleared. He said the disputed past bills should not be a reason for low gas supplies. “Does this mean we should disconnect electricity to the Karachi Water Board which has to pay Rs35bn to KE?”

Published in Dawn, April 2nd, 2018