The three-year-long Sui Southern Gas Company (SSGC)-KE dispute over payments and gas supply has exacted its toll on Karachi in a highly painful manner at a time when the federal government has approved the issuance of a national security certificate for the sale of shares held by KES Power Ltd in K-Electric to China's SEPL: Not only have the increased power outages adversely affected households, these have also caused a negative impact on the industrial output in the country's largest industrial city, crippling its ability to meet the deadlines for export orders in particular. The power regulator, National Electric Power Authority (Nepra), has, in the meantime, investigated the sudden power shortfall in the city, holding K-Electric responsible for the ongoing power crisis in the city of teeming millions and asking the federal government, which is a major shareholder in the SSGC, to help increase the gas quota for the power utility to ease public sufferings. The Nepra is said to have reviewed the "investigation" report and decided to initiate legal proceedings against the power utility for alleged violations of various responsibilities, including non-utilization of its full generation capacity, after its investigators conclude their three-day visit to Karachi. According to newspaper reports, the Nepra investigation committee noted that the load management carried out by K-Electric was beyond its claims and in addition to load shedding on account of gas curtailment. The KE network also experienced faults adding to the unplanned load shedding hours due to its fragile distribution system. At the same time, the regulator attributed the power crisis to lower gas availability than last year and asked the government, being a 24 percent shareholder of KE, to increase gas supply to 190mmcfd (million cubic feet per day). It said the gas supply was 50-60mmcfd lower than last year against KE's claim of about 100mmcfd. "Nepra took serious notice of the above-mentioned violations and decided to initiate legal proceedings against K-Electric," the regulator has been quoted as saying.

In its response, the KE seems to have taken a rational stance by welcoming Nepra's request to the government to increase gas supply to the utility without contesting the investigators' claim in relation to who is responsible for increased power outages in the city. K-Electric's spokesperson Sadia Dada, for example, has been quoted as saying: "We await the full report on the subject but in our preliminary comments we feel that the advisory issued by Nepra to ensure 190mmcfd gas is made available to K-Electric is a positive reinforcement which will certainly enable KE in restoring power supply to the city to routine." Here, the power utility has raised a valid point by stating that "based on information available in the statement it is pertinent to note that tariff on HSD (high speed diesel) is not determined. As already indicated in the statement, alternative fuel for gas-based plant has not been commissioned, therefore in the current state KE does not immediately have the option to use alternative fuel." This was its response to Nepra investigators' finding that "the committee also noted that infrastructure for alternative fuel/HSD operation at both the gas turbine-based plants - Korangi Combined Cycle Power Plant (KCCPP-225MW) and Bin Qasim Power Station-II (BQPS-II-529MW) - was available, but the utility had not yet commissioned the capacity and "adopted an irresponsible approach in this regard. Had these systems been in place, about 350MW could have been added and additional load shedding could have been avoided".

How ironic, however, it is when the government claims to have added an historic 10,000MW of power to the national grid in its ongoing five-year term, the criticality of load shedding challenge continues to persist. Karachi is suffering more than any other major town of the country mainly because of the fact that both ruling political parties at Islamabad and in Sindh do not have strong presence in Karachi. While it is heartening to note that the Economic Coordination Committee (ECC) of the Cabinet has accorded approval to the state-owned Pakistan State Oil to import furnace oil for the power sector to help the incumbent government to bring power outages to a minimum level due to minimum hydropower availability in order to brighten its electoral prospect, prime minister Shahid Khaqan Abbasi is required to do everything possible to help ease power crisis in Karachi on a war footing, taking into consideration the fact that representatives of all seven industrial estates in the city have given an ultimatum to the federal and provincial governments to resolve the issue of acute water shortages and prolonged power outages, failing which all industrial units in the city and Hub Industrial Estate (Balochistan) will shut down. He must also take into consideration another key fact: persisting power outages have the potential to trigger civic unrest, compromising city's law and order situation. As argued by trade and industry leaders, Karachi's seven industrial estates house over 15,000 units contributing up to 50 percent in exports and 50 percent in direct taxes. No government can therefore afford to allow large-scale shutdown of industrial activity to cause massive unemployment, loss of production and exports.

Copyright Business Recorder, 2018