News
Monday, September 03, 2012
KESC wants gas sale pact with SSGCKARACHI: Karachi Electric Supply Company (KESC) said on Sunday that the total amount payable by it to Sui Southern Gas Company (SSGC) was Rs 28 billion but not Rs 39 billion being claimed by SSGC through media. In a statement, it further clarified that this amount had mainly to be settled against Rs 18 billion payable by Karachi Water & Sewerage Board (KWSB) to KESC, as agreed; since both were state owned entities. The power utility said that it was quite unfortunate that SSGC kept referring to non-existent supply agreement, while the fact of the matter remained that SSGC had been shying away from KESC’s offer to sign a gas sale agreement (GSA). KESC has historically offered a number of times for SSGC to sign a GSA for 400mmcfd of gas supply to its generation plants, which will not only ensure the reduction of load shed in the city, but will also help in reducing the end user power tariff, by reducing the supplemental reliance on the 370% more expensive furnace oil. Currently KESC is being supplied approximately 50% of its natural gas requirement, which is a loss not only to KESC in terms of idle capacity, but also tantamount to public disservice since KESC is in a position to increase it power production, provided that SSGC steps up to the task. KESC stated that in the interest of its power consumers and the city dwellers at large; it was willing to extend its hand to SSGC as a gesture of goodwill and agree to work on an expedited payment plan for the clearance of dues, provided that SSGC also reciprocates in public interest and agrees to sign a GSA for the provision of 400mmcfd of gas to KESC. KESC further disclosed that since September 2008, it has paid an accumulated amount of Rs 96 billion to SSGC. Importantly another key fact that cannot be ignored was that the federal and provincial government departments and entities themselves owe KESC in excess of Rs 76 billion, creating massive cash flow issues for the power utility. staff report
Courtesy www.dailytimes.com.pk