ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has urged Sui Southern Gas Company Limited (SSGCL) to ink Gas Supply Agreement (GSA) with Karachi Electric (KE) to avert loadshedding in Karachi in future.
This was suggested in a letter to Managing Director of the gas utility, which has not finalised any GSA with power utility despite years of deliberations.
According to Syed Zawar Haider, Additional Director, Registrar Office, the authority took serious notice of excessive loadshedding in Karachi in June and July, 2020 and directed to conduct investigation against K-Electric under section 27 A of the Nepra Act, 1997. Accordingly, the investigation was conducted by the Investigation Committee (IC) and presented before the authority.
The findings of the investigation report revealed that KE did not make sufficient fuel arrangements to secure supply of electric power which includes non-execution of Gas Supply Agreement (GSA) with Sui Southern Gas Company Limited (SSGCL).
As per CCoE decision of April 23, 2018, Terms of Reference (ToRs) were to be framed and finalized for reconciliation/settlement of dues between KE and SSGCL, however, the agreement has not yet been executed.
In this regard, the Authority has advised SSGCL to settle the dispute of arrears with KE in pursuance of the decision of the CCoE of April 2018 and to forward the advisory to Ministry of Energy, SAPM on Power and SAPM on Petroleum.
Nepra has urged Managing Director SSGCL to expedite the matter in order to avoid loadshedding in Karachi in future due to fuel shortage.
According to official documents, the stock of KE receivables on account of tariff differential from Finance Division stood at Rs 200.7 billion ( principal) whereas KE's payables to SSGC are Rs 107 billion, of which Rs 93.3 billion is markup while Rs 13.7 billion is principal.
A number of meetings have already been held to sort out the outstanding issues, which are hampering smooth sale of 66.4 per cent share of KE owned by M/s Abraaj to Chinese company, Shanghai Electric Power (SEP).
However, no agreement has so far been finalized as reportedly some influential government office holders are making a "personal" effort to discourage the Chinese company from acquiring shares of Abraaj. This situation was allegedly witnessed at a recent meeting held in Privatisation Commission.
Copyright Business Recorder, 2020