SSGC fails to control UFG losses, takes in $189.966m from WB

Zeeshan Javaid

Islamabad—Taking in $189.966m under the head of Natural Gas Efficiency Project (NGEP) from premier international lending institution the World Bank (WB), the implementation partner of federal government Sui Southern Gas Company (SSGC) performed nothing substantial to control the gas leakage causing loss to national exchequer in billions.
The Oil and Gas Regulatory Authority (Ogra) approved the burden of amounting to mammoth Rs25b on to the legitimate end gas consumers by increasing the UFG (unaccounted for gas) volume in the gas tariff by 2.5 per cent to 7 per cent from existing 4.5 per cent in its determinations about final revenue requirement of gas utilities – Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipeline Ltd. (SNGPL) for financial years (FY) 2012-13 and 2013-14.
The World Bank in its mid-term report on the project expressed dissatisfaction over the performance of SSGC to control huge losses during transmission and distribution in the network; the said sate owned gas utility company despite investing billions of rupees of loan from WB claimed that the company will only be able to lower down the UFG level at 6.5% in FY 2015-16, the same level as that of FY 2008-09.
A copy of secret official communication between the World Bank and Federal Government (exclusively available with Pakistan Observer) revealed that The WB’s then country director to Pakistan, Rachid Benmessaoud wrote a letter in the name of Federal Secretary Economic Affairs Division (EAD), Dr. Waqar Masood Khan on July 5, 2015 regarding the guideline for accumulated amount of loans disbursement $100 million from two subsidiary bodies of WB including International Bank for Reconstruction and Development (IRBD) Loan No. 8154-PK and International Development Association (IDA) Financing No. 5099-PK.
According to the financing agreement between Pakistan and IDA (World Bank), AED (federal government institution) requested the Bank to provide assistance towards financing NGEP Project and the bank agreed to provide such assistance in an amount of one hundred million dollars ($100,000,000).
Similarly, another agreement between Pakistan and the International Bank for Reconstruction and Development (IRBD), the said institution agreed to provide assistance of Special Drawing Rights (SDR) of 64.5 million when converted into dollars, approximately it become $89.966 against NGEP project execution. The World Bank Mid-Term Review report launched on March 03, 2015 revealed that the company (SSGC) failed to achieve the overall project implementation and also expressed dissatisfaction over the component of progress achievements.
The report also revealed that the company was committed to rehabilitate the pipeline networks in Sindh and Balochistan provinces stretched up to 5,750Kms until the project completion date December 31, 2017, however, the progress or efficiency of the company can be gauged such as the implementation partner only succeeded to repair and maintenance of 68.90Kms pipelines till November 26, 2013.

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