It is too painful to see Karachi suffering due to lack of electricity in scorching heat. This is despite the available generation capacity within Karachi that is not being utilized. This time gas supply is a contention. In earlier load-sheddings, running steam power plants was an issue. Nepra kept asking KE to run its plants, but it won’t despite notices and fines. Now, there is gas supply issue with claims and counter claims.

For some secret reason, there is some profit to KE in not producing its own electricity. Apparently, all fuel costs are reimbursed and there should not be an issue. They have not shared the issue with the regulator or the public, so that their real loss in profit could be understood and possibly provided for. Partly, there might be cash flow issues due to the circular debt. Gas was apparently available without cash which SSGC refuses to continue, claiming receivables of some 87 billion Rupees or so. SSGC could have reduced supply to other sectors, had KE being a cash paying customer. On merit grounds, KE should get priority over CNG and captive power plants. Captive power plants have much lower thermal efficiency. It was once proposed and rightly so that if all captive power plants are closed in Karachi, the surplus generated due to higher energy efficiency would solve the gas problem. It should be at least partly valid today.

Published in Business Recorder, 15th April, 2018

https://epaper.brecorder.com/2018/04/15/16-page/710872-news.html