Senate Special Committee on Circular Debt was given a detailed briefing by Managing Director Sui Northern Gas Company Limited (SNGPL) and Sui Southern Gas Company Limited (SSGPL) regarding their gas supply to GINCOs and IPPs since 2013. The Committee was given a deep analysis as to why the amount of payables has been accumulating over the years and what measures if any have been taken to address the gravity of situation resulting in increased circular debt.
The meeting was held under the Chairmanship of Senator Syed Shibli Faraz here at the Parliament House on Monday and was attended among others by Senator Dr. Sikandar Mandhro, Syed Muzaffar Hussain Shah, Bahramand Khan Tangi, Kauda Babar, Member Planning Commission, MD SNGPL, Acting MD SSGPL, representatives from Power division and OGRA.
The Committee was told that the high circular debt in Gas Distribution Companies SNGPL and SSGPL is mainly due to the ever-increasing receivables of the gas companies and the rate difference between the purchase price and the sale price. The meeting was told that the rate at which the companies purchase gas is higher than the one they sell gas at and it results in the debt on the company increasing. It was also said that the amount of money yet to be paid to the company by WAPDA and other clients is in billions and it brings the SNGPL and SSGPL into loss.
The Committee noted that OGRA should share with the committee a concise solution to the matter of dealing with this accumulated payables and to get timely payments to the company as well. The Committee members observed that there has to be work on a long-term mechanism to deal with the problems in payables and receivables of the companies.