SSGC illegally benefitting CPPs worth Rs 130 billion; Reveals TI
Research Report
Sui Southern Gas Company Limited (SSGC) has reportedly benefitted a selected group of captive power plants (CPPs) by supplying gas, costing the public to the tune of Rs 130 billion.
Transparency International has making this shocking disclosure in a letter sent to Prime Minister Shahbaz Sharif.
In a letter to the premier, Transparency International has exposed SSGC’s intentional violation of the Gas Priority List to benefit privately owned captive power plants.
In their letter to Prime Minister Shehbaz Sharif TI further revealed that the Sui Southern Gas Company (SSGC), in gross violation of the Gas Priority List notified by the Ministry of Energy, is supplying costly RLNG to Karachi’s power utility instead of natural gas.
This sheer violation of the order is actually resulting in an extremely higher cost of electricity for electricity consumers of Karachi. Written by Ms Yasmin Lari – Chairperson and Justice (R) Nasira Iqbal Vice Chair – TIP, the letter further revealed that the gas company stopped supplying natural gas to KE from October 2021 to benefit the Captive Power Plants (CPPs).
This means almost Rs 131 billion worth of wrongful benefit has been allegedly passed to private entities and the burden of the same has been passed to the electricity consumers.
According to the notification referred in the letter by the Ministry of Energy, the power sector is prioritized as second for natural gas allocation, while captive power plants have 3rd priority.
However, SSGC has secretly violated the priority order of the Government of Pakistan and brought Captive Power Plants to the second. They have also been found to completely ignore the power sector as its being supplied with costly imported gas (RLNG) at Rs. 4,656/MMBTU.
The cost of natural gas on the other hand which is being supplied to private entities including captive power plants costs only Rs 857/MMBTU.
The letter further highlighted that due to the power generation on RLNG, the consumers of electricity in the city are compelled to pay at least Rs. 17.5/per unit additional. SSGC is currently supplying a total of 210 MMCFD natural gas to captive power plants at the rate of PKR 857/MMBTU and PKR1,087/MMBTU to captive general industries, which is at third priority order, while the power sector, which is supposed to be on second priority, as allocated by the Government of Pakistan, should be supplied 130 MMCFD of natural gas is instead being supplied zero local gas, and 70 MMCFD of expensive RLNG.
TIP recommended that the Prime Minister immediately conduct an inspection against SSGC to ensure implementation of the Gas Priority List notified in 2018 as per the Federal Cabinet Committee on Energy and to ensure that the gas company provides 130 MMCFD natural gas for Karachi’s Electricity Generation so that cheaper electricity can be produced. Transparency International further noted that the Rule of Law should be implemented in this regard which is the only way to stop the ongoing corruption.
The letter from Transparency International shows such a high level of gross negligence and sheer violation of the Government’s natural gas allocation order which is not possible without the amalgamation of the top brass of the company who is apparently found involved in passing on an illegal benefit to a select few from the private sector on the cost of financial pain and misery to the masses in Karachi.
The illegal benefit to the tune of a whopping Rs 130 billion which is passed from SSGC to the private owners of captive industry warrants an immediate forensic audit of the affairs of the SSGC’s business.
Senior sources from the SSGC on the condition of anonymity also suggest the massive scandal of Rs 130 billion benefits to a select few from a government-owned entity at the cost of the public may raise the eyebrows of investigative authorities including the FIA and the National Accountability Bureau (NAB).
A forensic audit of this matter on the basis of a letter from Transparency International may land SSGC and the Government of Pakistan in hot waters in days to come.
