KE spokesperson Sadia Dada says the Sui Southern Gas Company (SSGC) has cut 100mmcfd gas supply to the power utility due to which it has suffered a 500MW electricity shortfall as plants on said gas supply are lying idle. As a result, the residents in Karachi are facing two to three hours of additional load shedding.
After Karachi plunged into darkness, Sindh Chief Minister Murad Ali Shah sought the federal government`s intervention to resolve a dispute between two Karachi-based electricity and gas utilities KE and SSGC to provide relief to the residents and businesses in Karachi. Shah reported to the prime minister that people of Karachi were enduring 10-hour load shedding on a daily basis when temperatures were continuously rising and taking a heavy toll on students who were appearing in the secondary school board examinations. Such a situation could create a law and order problem, he warned.
The two utilities have been involved in a dispute for almost three years over outstanding payments and reduced gas supplies. Early this month, the gas utility made a conditional offer to increase gas supply to the KE for a few days but not without settlement of Rs80 billion arrears. Besides its own gas constraints, reports said 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 the KE`s transfer to the Shanghai Electric Power Limited (SEPL) of China from the current management of Abraaj Capital.
The federal government decided last month to issue a national security certificate for the sale of shares held by the KES Power Ltd in the K-Electric Ltd (KEL) to the Chinese multinational SEPL. SSGCL said it was facing continuous shortage of 250mmcfd of gas due to depletion of reservoirs at different gas fields and on the contrary increasing demand, particularly in the domestic sector. In addition, it has started supplying 20mmcfd gas to the Sindh Nooriabad Power Company during this financial year as per the gas sale agreement.
It said the KE was categorically told in April last year that it would be very difficult to sustain even existing supplies. The gas company said it was struggling to meet obligatory requirements of customers having gas sales agreements, making full payments, including advance security deposits.The gas company said KE was not providing security deposit equal to three-month billing or Rs7.2bn. Also, the `FIA is probing the continuous supply of gas to K-Electric by SSGC despite huge over dues on K-Electric against the gas sale`.
KE said the power utility had never defaulted in payment of its current gas bills during the past five years and its old principle outstanding gas bills were only Rs13.7bn while the remaining amount of Rs66bn was interest which had been challenged in court.
