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KESC claims: SSGC version

September 20, 2012

THIS refers to the letter ‘SSGC claims: KESC version’ (Sept 13) by KESC spokesperson Aminur Rahman. While SSGC continues to bear the brunt of the burgeoning receivables, the KESC gives an impression that it is the aggrieved party.

For the last six months the KESC has paid only the amount equivalent to the current bills and has demonstrated its inability to settle its outstanding dues, including the late payment surcharge which has led to the receivables mounting to a staggering Rs39 billion.

The fact is that Rs28 billion, as quoted by the KESC, does not take into account the interest charges payable, which are three per cent per annum above the original State Bank rate as per the payment accord between the two utilities.

The KESC claims that it had offered the SSGC to sign a GSA for 400 mmcfd of gas supply to its generation plants. However, this very quantity is dependent on the gas availability, its allocation by the government and the government’s gas load management policy that determines priorities for supply of gas to industrial, commercial and domestic sectors.

The KESC has many times asserted that a GSA agreement does not exist when the fact is that two GSAs for the supply of gas have existed since 1978 between the SSGC and the KESC. The KESC has also not provided any security to the SSGC. And yet the gas utility continues to provide the KESC with steady supply.

The spokesperson also claims that the KESC has paid an accumulated amount of Rs96bn to the SSGC since September 2008. What he failed to mention was that during this period his company had consumed gas to the amount of Rs120bn, leaving the SSGC with a trail of deficit to bridge.

Despite the deteriorating receivables’ position, the SSGC has been providing considerable supply of gas to the KESC even though the GSAs between the two companies are for supply of only 10 mmcfd.

S. NASREEN HUSSAIN Deputy General Manager Corporate Communications Sui Southern Gas Company Karachi