Power disputes

The ongoing heatwave in Karachi – accompanied as always by prolonged power cuts – has reignited the long-running battle between K-Electric and the Sui Southern Gas Company over the supply of gas to the power utility. K-Electric maintains that it had asked Sui Gas for enhanced supply for the summer back in February so that it would be able to run all its power plants and assure an uninterrupted supply of electricity. A KE spokesperson has said that one gas-fired plant has been shut because of the shortage, resulting in electricity shortfall of 600MWs. Sui Gas, however, says it will only provide the gas originally agreed upon until KE clears all its dues. Both sides have legitimate grievances. Our gas supply is rapidly depleting, making rationing essential. The government has decided domestic consumers need to be given first priority. While the amount KE owes Sui Gas is disputed, it is over Rs10 billion. Sui has demanded repayment in full before it renegotiates the amount of gas it provides KE which, on the other hand, says that it is unable to repay Sui until it is able to collect the dues it is owed, with the Karachi Water and Sewerage Board alone owing K-Electric more than it owes Sui Gas. As KE points out that just because the KWSB owes it so much money doesn’t mean that it has shut down its supply of electricity since it provides an essential function to the citizens of Karachi. Similarly, it argues, Sui shouldn’t restrict the supply of gas to KE.

The dispute between K-Electric and Sui Gas is one that is being repeated throughout the country. It too is borne of the circular debt in our power industry. The government paid off this circular debt when it came into power in 2013 but didn’t take any steps to prevent its reoccurrence. The other factor in play is our mismanagement of our natural gas resources. Going back to the Musharraf era, we never practised conservation. Gas was touted as the cheap, limitless fuel alternative for cars and industry. Meanwhile, all attempts to construct a pipeline that would import gas from Iran came to naught and the Tapi pipeline has also stalled. Both K-Electric and Sui Gas feel like the aggrieved party in this tussle and both have a point. This is a problem that has been simmering for years and the only solution is for the government to either import sufficient gas or devise a rationing plan. Pakistan’s addiction to gas was always going to backfire and this K-Electric-Sui fight is just one manifestation of a broader crisis.