Gas outages in Sindh for 10 days

Sui Southern Gas Company announces it will resort to gas outages in Sindh for 10 days starting October 26

KARACHI: The Sui Southern Gas Company (SSGC) has announced that it will resort to gas outages in Sindh for 10 days starting October 26 due to maintenance of fields – a move likely to result in shortages. The company, however, has said that domestic and commercial consumers will be given priority in gas supply.

SSGC Managing Director Dr Faizullah Abbasi said that the company has no plans to disconnect supply to the Karachi Electric Supply Company (KESC) considering the problems faced by residents of the city.

“People are already in a miserable condition due to power outages and SSGC is not cruel to add to their miseries,” he said while speaking to members and office-bearers of the Korangi Association of Trade and Industry (Kati) at a meeting here on Tuesday.

Abbasi said that even though KESC arrears had gone up to Rs22 billion, there was no firm commitment by the power distributor about when it was going to clear dues despite the fact that SSGC is facing an acute shortage of funds.

He pointed out that KESC, which is earning Rs7 billion per month, has only paid the bill for August but there was no clearance of arrears. According to him, it also refused to pay the late-payment surcharge.

He said that except for the power supplier, SSGC’s recovery from consumers is almost 99.9 per cent.

Brushing aside allegations that SSGC had discontinued supply to the KESC due to non-payment of dues, Abbasi clarified that the reduction was caused by a disruption in production at the Kadanwari gas field.

He mentioned that while SSGC was earning a profit of Rs1 billion in 1999 by selling gas worth Rs16 billion, its profit has dropped to a meagre Rs260 million on sales of Rs108 billion worth of gas per annum.

Talking to The Express Tribune, a KESC official agreed that the company had to pay Rs22 billion to SSGC, but said the amount included Rs4 billion in interest which may not be paid. “Companies that are stuck in the inter-corporate debt mess are not paying interest to each other and we are part of that chain.”

He said that while other companies having billions blocked in debt were cooperating with each other, KESC was being targeted.

“We are getting 180 million cubic feet of gas per day (mmcfd) from SSGC compared with the 220 mmcfd earlier.” KESC has receivables of Rs48 billion compared to payables of Rs44 billion.

Kati patron-in-chief SM Muneer, while speaking during the meeting, said all public sector organisations are nearing bankruptcy as annual losses of enterprises like Pakistan Railways, the Water and Power Development Authority (Wapda) and Pakistan Steel have gone up to Rs300 billion annually.

He asked the government to appoint representatives of the business community on the boards of these organisations as businessmen have the capability to turn them around.

Earlier, Kati Chairman Syed Johar Ali Qandhari said textile industries are earning $11 billion per annum and providing employment to 40 per cent of the workforce but due to gas outages and other factors over 300 textile units and 10,000 weaving units have closed down, leaving 500,000 jobless.

He requested the SSGC MD not to resort to gas outages in industrial areas and provide gas connections to power plants located within industrial units.

Published in The Express Tribune October 20^th, 2010.