KARACHI – The Karachi Electric Supply Company (KESC) has restored the zero load shedding regime in industrial areas, after receiving around 80 MMCFD gas from the Sui Southern Gas Company (SSGC) without making any payments to the latter.
The SSGC had curtailed gas supply to the KESC due to the non-payment of Rs 3 billion dues for December 2010, but in total, the KESC still owes almost Rs 23 billion to the gas utility, sources told Pakistan Today.
“The KESC was confident that leaving industries without power supply for at least 16 hours would translate into widespread protests, and the government authorities concerned will be forced to intervene and arrange gas supply immediately to resolve the issue,” sources said.
The KESC’s gas-fired generation units had around 30 MMCFD – deemed to adequate enough for production – the power utility did not operate the other units on furnace oil despite the fact that they could operate on either oil or gas. “This was the KESC’s way of pressuring the SSGC,” sources said.
And the tactic worked: the SSGC, which had claimed to receive reduced supply from its sources, increased the supply to KESC on Wednesday soon after a meeting with Sindh Governor Dr Ishratul Ebad.
While the SSGC presented the excuse of gas supply shortage to the governor, sources said, but the actual issue remained the payment of its outstanding dues. “Besides the Rs 23 billion that the KESC owes to the SSGC, the power utility paid Rs 3 billion as the monthly bill for November. The December bill is yet to be cleared,” sources claimed.
Thus the sudden curtailment of over 50 MMCFD to KESC, sources claimed, proved to be “an exercise in futility” as the power utility succeeded in getting gas supply normalised without bowing before the SSGC.
It is worth mentioning here that the SSGC managing director (MD), in a press briefing on Monday, had claimed that the gas utility was providing gas to the KESC without any agreement, and further, that the 276 MMCFD gas that KESC is claiming as a right was merely an allocation and not part of any signed agreement.
The SSGC MD had claimed that though the SSGC wanted to sign a Gas Sale Agreement (GSA) with the KESC, the latter wanted to do so on its own terms as opposed to the proper procedure of agreement followed when the utility supplier and the consumer enter into a contract. Besides, he said, the end-user of gas has to provide a bank guarantee – referred to as the Gas Security Deposit (GSD), which is equivalent to three months of gas sales. This translates to approximate Rs 10 billion, which the KESC was not willing to commit.
