Gas theft/leakage: government suffered Rs 1.13 billion loss

The Auditor-General of Pakistan has detected a loss of to the national exchequer due to leakage/theft of gas in Quetta. According to Audit Report 2010-11, in Sui Southern Gas Company Limited (SSGC), it was observed that total unaccounted-for gas (UFG) in Quetta was 5,778 MMCF during the year 2008-09, resulting in loss of Rs 1.13 billion, but the Surveillance and Monitoring Department of Quetta detected only two cases of gas theft comprising only one (1) MMCF out of total 5778 MMCF of UFG in Quetta.
The S&M Department, Quetta deals only with 53 industrial and 1673 commercial customers in Quetta; whereas, 138,993 domestic customers are not monitored by the S&M Department, as was intimated by the management. The report says that the huge loss on account of gas theft indicated loose controls prevalent in the Company on the part of S&M Department, CRD and Distribution Department.
The matter was brought to the notice of Ministry/management on August 16, 2010. The management in its reply dated October 22, 2010 admitted the present unsatisfactory role of S&M Department, CRD and Distribution Department but did not furnish reply for the control weaknesses to the extent of negligence and poor performance of management in controlling gas theft in Quetta.
The matter needed to be investigated with a view to fixing responsibility for the loss upon person(s) found at fault, under intimation to Audit. The DAC meeting held on December 11, 2010, directed the Company to show steps taken by the management towards reduction of UFG so that Audit could review and assess their impact. The Audit had to provide its review report to the Company and the Ministry accordingly.
The report says that as per directives of the DAC, the steps taken by the management for reduction of UFG were verified by Audit, which included replacement of 9,742 meters from July to November, 2010 on account of Passing Unregistered Gas (PUG), Direct Passing Gas (DPG), tampering, etc, and disconnection of 804 connections on account of illegal use of gas. The increasing trend of UFG was evidence of the ineffectiveness of the steps taken by the management even after adopting the measures. No significant reduction was noticed in the quantum of UFG as the latest rate of 35.8 percent as against normal 5.5 percent fixed by Ogra. Audit suggested taking concrete remedial measures to avoid losses on this account.