KESC wrangles with SSGC over outstanding dues

The amount owed to the gas company is lower than what it has been asked for, says power utility.

KARACHI: The Karachi Electric Supply (KESC) has hit back at the Sui Southern Gas Company (SSGC) after Senator Dr Asim Hussain, adviser to the prime minister on petroleum and natural resources, instructed the power utility to immediately settle its dues with the gas company.

SSGC said that the power utility owes it Rs39 billion. But KESC disputes this, claiming that the amount owed is actually Rs28 billion, and that even this figure should be adjusted against the Rs18 billion that Karachi Water and Sewerage Board owes it, since both are state-owned entities.

KESC also stated that it has major cash flow problems because the federal and provincial governments owe it more than Rs76 billion. It added that the finance ministry can adjust the amount owed within government receivables.

The circular debt accrued from these feuds hurts consumers as water, gas and electricity supply are often curtailed. A blame game then ensues between the utilities regarding which organisation is responsible for halting supply.

The power company said that SSGC has been “shying away” from signing the Gas Sale Agreement, under which the gas utility will provide 400 million cubic feet of gas to the power utility. KESC said that currently, it only receive 50 per cent of this, which is why there is more load-shedding in Karachi. If the agreement is signed, it will expedite the payment of outstanding dues. KESC claimed that the signing of the agreement is “in the interest of power consumers and city dwellers at large.” But SSGC said that it has no formal agreement with the power utility to supply a set amount of gas to it.

Published in The Express Tribune, September 3^rd, 2012.