Unbundling of gas network postponed till resolution of constitutional issues

ISLAMABAD: In a major development, the federal government has acceded to the demands of Sindh and Khyber Pakhtunkhwa and decided to resolve the constitutional issues before pressing for unbundling of gas network system of the country.

Sindh and KP stuck to their stances on gas sector reforms and again opposed unbundling of gas network, arguing that implementation of the Constitution must be prerequisite prior to going for gas reforms. Both the provinces have also substantiated their arguments saying that they will not support unbundling of the gas system in the country into separate transmission and distribution networks if prior to any such exercise, necessary legal reforms are not carried out in the regulatory control and management of oil and gas by assigning equal role to provinces.

The way the central government wants to unbundle the country’s gas network system and introduce reforms is simply unacceptable, a senior official who attended the crucial meeting held here on Monday under the Inter-Provincial Coordination Committee (IPCC) told The News while quoting representatives of KP and Sindh governments.

The Petroleum Division also agreed to share oil and gas production data with provinces on weekly basis. The Petroleum Division would provide data through emails. In the meeting, Water and Power Division also agreed to share the real time data about electricity production with KP and other provinces. The Power Division also assured KP that Peshawar Electric Supply Company (Pesco) will pay the dues in the head of collection of electricity duty to the province on monthly basis. However, the Petroleum Division has declined access of provinces to supervisory control and data acquisition (SCADA). It is a computerised system of gas companies that gives information as to how much gas is moving through the pipelines.

Coming to the inside story of the gas sector reforms, the official said, KP’s representative turned out to be a hard nut when he continued asking for the handing over of gas distribution and transmission line to provinces and stuck to his stance.

Under gas sector reforms, the central government wants to make four gas distribution companies out of existing two companies —Sui Southern Gas Company Limited and Sui Northern Gas Private Limited Company. Every province will have each gas distribution company. The Centre will be having control of gas transmission line. The provinces are not inclined to buy the version of federal government on the proposed gas reforms as they want the control of the gas transmission and distribution system with the prior condition of certain legal reforms and strict implementation of the Constitution dealing with oil and gas sector issues.

At the outset of the meeting, the official said, Khalidur Rehman, who is the team leader of the gas reform programme on behalf of the government, gave a detailed briefing wherein he presented the gas demand-supply scenario and highlighted the importance of unbundling of the gas network system. Khalidur Rehman told that Sindh has agreed to reforms and wants them subject to implementation of the Constitution. He said the KP government wants handing over of both gas transmission and distribution system and termed the demand unrealistic, saying it would ruin the gas sector reforms.

It infuriated the representative of KP who stated that implementation of the Constitution must be the prerequisite prior to gas reforms.