KE owes 122 billion rupees to SSGC

SSGC would once again like to reiterate that the only GSA signed between SSGC and KE was for 10 mmcfd and despite less gas being injected into SSGC’s system from the gas fields, regardless of the season, SSGC has always provided much more gas to KE than the GSA allocated amount so as to avert power outages in the city of Karachi. Currently SSGC is providing on average 70 to 100 mmcfd gas to KE while the Company has provided 270 mmcfd plus gas to the power company in summers this year due to greater demand for gas when KE failed to arrange alternate fuels for power generation (FO / Diesel).

The main reason behind no progress of signing GSA was always due to KE reluctance to abide by CCOE decision of April 2018. NEPRA also initiated investigation of power outages in Karachi and has submitted a report in this respect. Earlier in 2018, NEPRA also conducted an inquiry and report of reasons of excessive load shedding is available on records. SSGC is committed towards ironing out points of contentions with KE and already started negotiations on the Supply agreement despite the fact that over dues KE owes to the gas utility reached to Rs. 122 billion, a figure on which the latter does not agree with.  However, SSGC has always maintained that the long pending issue of growing over dues need to be sorted out before the Company inks a fresh GSA with KE.

Regarding the over dues, it must be stressed that in fact in April 2018 both the companies SSGC and KE reached an amicable solution of the issue in pursuance of the April 2018 decision of the Cabinet Committee on Energy (CCOE) wherein the CCOE directed for the finalization and signing of TORs for the settlement of dues between SSGC, KE and Karachi Water and Sewerage Board. The ToRs were initialed by the MDs of both the Companies (SSGC and KE) in April 2018 and it was decided to engage an independent reputable Chartered Accountant Firm for the purpose. While SSGC had sent the signed document (TORs) to KE in August that year, KE is still reluctant to counter-sign the same. In fact, in June 2018, KE went to the Sindh High Court when SSGC exerted pressure on KE to execute the TORs for reconciliation.

It is pertinent to mention here that the Ministry of Energy remained in picture on the developments related to the above issue since 2018 and very recently as per NEPRA directives, SSGC has referred the matter of implementation of CCOE decision of April 23, 2018 once again to the concerned quarters in Islamabad. SSGC is committed to work towards the resolution of all outstanding issues and provide full cooperation in this respect.

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