The ongoing row between Karachi Electric Supply Company (KESC) and Sui Southern Gas Company (SSGC) over gas supply issue has hit the consumers hard, as they are braving up to 12 hours load shedding daily for the last many days. Sources said that the KESC was using pressure tactics over the issue, as the utility can generate electricity through furnace oil to bridge the gap between demand and supply.
They said the KESC has six duel-fuelled turbines at Bin Qasim Power Plant (BQPP) each having a capacity of 160-megawatt electricity, which have been shut down by the KESC management. They said KESC has installed three new gas turbines of 115 MW each at Bin Qasim and for commissioning these plants the utility is seeking extra gas supply.
Critics have questioned if the power utility is seeking more gas to run its newly installed gas turbines for meeting the energy crises in the city, then why it has shut down its already functional six power units, having generation capacity of 160 MW each. They said Economic Co-ordination Committee of the Cabinet had decided in year 2008 SSGC would supply 267 mmcfd gas to KESC, but due to growing gas constraints, SSGC is only managing 200 mmcfd gas to KESC.
It is pertinent to note here that KESC has not paid SSGC outstanding dues that have surged to Rs 31 billion rupees. They said KESC was allowed by the government to procure oil from Pakistan State Oil (PSO) at subsidised rates during the month of Ramadan. The KESC is getting around 700 megawatt electricity from WAPDA and its outstanding against KESC have swelled to Rs 42 billion.
At present, the total generation capacity of utility is 1600 megawatt. KESC authorities say that the utility cannot pay dues of SSGC, PSO and WAPDA, as it has over Rs 50 outstanding against various government and general consumers. KESC said that the utility's new power plant at Bin Qasim has been completed at a cost of Rs 450 million dollars but it has not yet been commissioned due to non-supply of 130 MMCFD of natural gas committed by the government.
From 2005 to 2010 KESC borrowed loans of Rs 27 billion from International Finance Corporation (IFC), Rs 35 billion from Asian Development Bank and Rs 8 billion from banking consortium for setting up new development projects. Sources said that ESC have also touched the limit of Rs 6 billion overdraft limit from local banks. The KESC has to pay Rs 31 billion to SSGC, Rs 4.5 billion to Pakistan State Oil (PSO) and Rs 2.5 billion to Karachi Nuclear Power Plant (Kanup).
The company has not paid the concerned departments the amount it collected from consumers under the head of TV licence fee and income tax, besides the Rs 780 million of electricity duty to Sindh government. On the other hand, the KESC receivables are; Rs 8 billion from Karachi Water & Sewerage Board (KW&SB), Rs 220 million rupees from police, Rs 160 million from City District Government Karachi (CDGK) in terms of street lights and Rs 70 million in term of park lights, and Rs 17 billion from its two lakh consumers.
Sources claimed the KESC has mortgaged the lands of its three power houses against borrowing. They said that nine grid stations have also been mortgaged for borrowing. On one hand, the KESC is not generating electricity at it full capacity and on the other, its management using pressure tactics to obtain gas and oil free of cost, said Chaudhry Mazhar Ali, General Secretary KESC Shares Holders Association.
He said the KESC stand about the amended agreement is not true, because the original agreement was inked by Abdul Aziz Hamid Aljmoha of KES Power and Privatisation Commission of Pakistan. The amended agreement had been signed by KESC and Ministry of Power, Government of Pakistan, he added.
Citing anomalies in the amended agreement, Mazhar said the agreement has given numerous unwanted relaxation to the company. He said that amended agreement allowed KESC extra timeframe of three years to reduce Transmission and Distribution Losses (T&D). Chaudhry Mazhar further said that the agreement also extended the timeframe for making investment of 235 million dollars for improvement of KESC network.