K-Electric moves SHC against SSGC

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KARACHI: Following the long-running dispute between K-Electric (KE) and Sui Southern Gas Company (SSGC) over non-payment of utility bills, KE has filed a petition in the Sindh High Court (SHC) over threats of reduction in gas pressure by SSGC.

Earlier in April, KE and SSGC signed Term of Reference (ToR) after the intervention by both the federal and the provincial government to ensure gas supply to KE. However, shortly after SSGC in a letter has notified KE that it would be reducing gas pressure from next month, which would have a substantial impact on the electricity supply to the metropolis.

“The reduction in the gas supply will result in a substantial shortfall in electricity supply to the people of Karachi,” said a petition filed by KE to SHC, which would be heard on June 20. However, the court has advised the respondents – SSGC and Karachi Water and Sewerage Board (KW&SB), not to take any action against KE till the next date of hearing.

“Through a letter dated May 24, 2018, SSGC has been threatening KE of reduced gas supply to its power plants if KE fails to sign new ToRs set by SSGC,” industry sources informed Pakistan Today.

However, following this recent development, KE has challenged SSGC’s letter by filing a petition in the SHC. Moreover, KE has submitted the ToRs signed by KE’s and SSGC’s management earlier in April.

However, according to the petitioner – KE, respondents – SSGC and KW&SB, have unilaterally updated the ToR and are now seeking KE to sign the changed ToRs, the petition claimed.

It is pertinent to mention that the long-running dispute regarding non-payment of bills is yet to be resolved.

In April, SSGC and KW&SB were taken up before the federal cabinet committee on energy under the chairmanship of former prime minister Shahid Khaqan Abbasi, who vide their decision dated April 23, 2018 and resolved that ToRs for reconciliation of the dues between SSGC and KE as well as KW&SB will be finalised within fifteen days, whereas such process would be supervised by the adviser to prime minister.

However, according to the petition, in view of the completion of the term of previous government and formation of new set up of the interim government, the ToRs could not be finalised, however, respondents intend to reduce the gas supply to the petitioner in totally arbitrary manner.

The petitioner is still willing to resolve the dispute and sign the ToRs as agreed between the petitioner and SSGC pursuant to cabinet’s decision. The petitioner requested the court that respondents may be directed not to violate the decision of the cabinet committee, as according to learned counsel, reduction in the gas supply will result in a substantial shortfall in electricity supply to the public at large.

The court has issued a pre-admission notice to the respondents as well as DAG for June 20, when comments shall be filed. Till the next date of hearing, respondents shall not take any action against the petitioner in violation of the decision of the cabinet committee as referred to hereinabove, including reduction of gas supply provided petitioner continues to pay current bills regularly, the court further ordered.

Meanwhile, the court advised that all parties shall make all possible efforts to ensure compliance of the aforesaid decision and to settle the dispute by signing the ToRs as per cabinet decision.