K-P back-pedals on Karak gas project

Rs31m released for execution of project withdrawn

The Karak residents’ dream to see their homes supplied with natural gas appears to have shattered as the Khyber-Pakhtunkhwa (K-P) government has withdrawn the Rs31 million funds released as initial amount to start the gas supply project.

The Sui Northern Gas Pipelines Limited (SNGPL) has returned the amount – which is supposed to be utilised on other projects – to the K-P Finance Department.

The Chief Minister House had sent a letter to the provincial finance department in the first week of July, directing it to repossess the funds released for the execution of the project, sources privy to the matter told The Express Tribune on Monday.

“The information to rescind Rs31 million released as initial amount to start the project was sent to the finance department,” said an official close to the matter, seeking anonymity. “The project has been suspended indefinitely.”



On November 14, 2016, the K-P government and the Federal Ministry of Petroleum and Natural Resources had inked an agreement for the project under which the households of Karak and Hangu districts were to be supplied with natural gas in three phases.

In the first phase, houses within 5km radius of oil and gas fields were to get the gas supply, said the official, adding that in the second phase houses located around the main pipeline were slated for the gas supply; and then the whole district in the third and final phase.

“The federal government had promised to increase the gas development surcharge for execution of the project,” said the official, adding that it delayed the increment and it is still pending.

The K-P government had decided that the money needed for the project would be borrowed from the 10% oil and gas royalty funds of Karak and Hangu districts, the official said, adding that the borrowed amount was meant to be returned to the districts on receipt of the money for the project from the federal government.



The SNGPL had asked for Rs31 million for Karak and Rs120 million for Hangu projects. As decided, the K-P government had provided the amount to the gas company from 10 per cent oil and gas royalty collected from Karak and Hangu.

The official further said that that Rs31 million released for the Karak project had been withdrawn. However, Rs114 million released for the Hangu project was being effectively utilised, he added.

“Work on the Hangu project is progressing at a good pace, but the Karak project has been suspended because the Chairman of the District Development Advisory Committee (DDAC), Gul Sahib Khan wants to spend the money on other uplift schemes in the district,” the official said, adding that after Khan’s objections, the K-P chief minister had directed the finance department to rescind the released funds worth Rs31 million.

According to the official, the K-P government is facing problems in Karak due to people’s agitation over non-provision of gas supply. “The decision will surely tarnish the image of the K-P government in front of the people of Karak,” he said.

The Karak DDAC chairman was not available for comments despite repeated attempts.