Delayed payments to the local contractors is paving the way for expensive foreign contractors at SSGC

Sui Southern Gas Company (SSGC) has always been in the news for the wrong reasons. The company responsible for the distribution and transmission of gas in the southern region of Pakistan has been cursed by poor and politically motivated management at the top levels causing a number of serious issues.

SSGC has been operating without a permanent managing director since 2016 which has resulted in serious deterioration in performance. Moreover appointments on key posts on the basis of political affiliations have largely contributed to the decline in the company’s performance. According to sources SSGC is hiring people from the market who lack the required expertise for instance expertise related to gas distribution are not available in the open market, therefore, there is a higher probability that the newly hired people will lack the qualification and knowledge required by the company. Market experts are of the opinion that SSGC can only flourish if the right people are given the opportunity to run the company sincerely.

 According to sources the accounts of the company have not been finalized since 2017. The local contractors who had worked on the LNG projects are still waiting for clearance of dues by the SSGC. No objections have been raised by SSGC or anyone else regarding the projects but SSGC is still not clearing dues of the contractors even after years have passed. This discouraging behavior can potentially push out the local contractors from the market altogether leaving only foreign companies in play.

Then there is the issue of the ever increasing levels of unaccounted-for-gas (UFG). SSGC closed the previous fiscal year FY2019-2020 18% UFG level, which was two percentage points higher than last year and will cost the company a penalty of Rs25 billion by the regulator. The company has consistently failed to reduce the levels of UFG which is costing the national exchequer billion of rupees every year.

Senior experts of the engineering community believe that the woes of SSGC can only be reduced when the right people are sitting at the decision making positions of the company without political inclinations.