SSGC sinking in KESC’s woes

KARACHI: The Sui Southern Gas Company (SSGC) has said that it is trapped in a circular debt crisis. The organisation’s managing director said that non-payment by the Karachi Electric Supply Company (KESC) and unaccounted-for-gas were major burdens on the organisation.

“KESC will take Sui Southern down with itself,” claimed the newly-appointed managing director of SSGC, Dr Faizullah Abbasi.

The Sui Southern Gas Company along with Pakistan State Oil has been trapped in the circular debt crisis. KESC is not paying SSGC its outstanding dues and the gas theft and leakage is aggravating the company’s problems.

KESC, despite charging hefty tariffs from consumers, is failing to pay its liabilities. KESC owed SSGC Rs1 billion until June last year. At this point, both companies with mutual consent decided a payment plan spanning two years. According to the schedule, payment had to be made on monthly basis to SSGC from July 2009 onwards and Rs500 million had to be paid monthly from the backlog. However, KESC has failed to pay its old and new debts and the total liabilities owed by the company to SSGC has reached Rs21 billion.

Abbasi, while talking to journalists on Thursday, said that the management of KESC says a lot of things but does not implement its plans. He added “we have contacted Chief Secretary Sindh and he has ordered the dues worth Rs9 billion owed by KWSB be paid directly to SSGC instead of KESC.”

He said that SSGC is providing 210 million cubic feet (mmcf) of gas per annum to KESC and sometimes the volume increases to 256mmcf. He added that KESC is receiving this gas without any accord.

He said that SSGC did not intend to suspend gas supply to KESC to sink Karachi into darkness but the financial woes are likely to affect the pace of development projects of SSGC.

Sources revealed that SSGC’s total dues stood at Rs31.6 billion out of which KESC owes Rs21 billion, Wapda owes Rs7 billion and Sui Northern owes Rs2.4 billion.

Published in The Express Tribune, July 16^th, 2010.