Rashakai SEZ

Sui Southern Gas Company Misses Deadline for Important CPEC Project

The Sui Southern Gas Company (SSGC) has failed to meet the deadline for the gas supply project to the Dhabeji Special Economic Zone (SEZ) under the China-Pakistan Economic Corridor (CPEC) because the Frontier Works Organization’s (FWO) subsidiary, KATCAM, had barred it from executing the N-5 road crossing.

The gas schemes of three early harvest SEZs under the CPEC (except for the Rashakai SEZ in Khyber Pakhtunkhwa, where the gas supply scheme is almost completed) are either in the initial stages or are being hindered.

As per the plan, the project for the supply of 13.5 mmcfd gas to the Dhabeji SEZ in Sindh was initiated in June 2020 and was supposed to be completed in December 2021. It was to be completed at the cost of Rs. 427.68 million but it has missed the deadline, the source said.

Also, the pipeline construction of the project has been completed, except for the National Highway Authority (NHA) road crossing (N-5) as KATCAM is preventing the SSGC from executing the crossing until the SSGC’s pending matters with the FWO are settled, despite the NHA and the Government of Sindh permitting the execution of the crossing.

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The Petroleum Division has taken the matter up with M/s KATCAM, and the SSGC has submitted a revised PC-1 document due to an increase in the scope of the project as the SEZMC has changed the TBS location from initially approved coordinates.

A meeting of the Departmental Development Working Party (DDWP) at the Petroleum Division on 21 December 2021 had resulted in the approval of the revised PC-1. The SSGC will commence an additional three-km-long pipeline and TBS construction accordingly. The project has achieved 95 percent physical progress and 72 percent financial progress. Its total cost is Rs 427.88 million which was released in FY 2019-20 and 2020-21. So far, Rs. 276.3 million has been withdrawn from the Assignment Account and incurred in the procurement of consumable items.

Due to the unavailability of the Right of Way (ROW) land in FY 2020-21, pipeline construction could not be started and the SSGC had to surrender an amount of Rs. 151 58 million in May 2021 as per the procedure.

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Regarding the supply of 10 mmcfd gas to the Bostan SEZ in Balochistan, the source said that it is at a preliminary stage. The project is to be completed at the cost of Rs. 731.447 million and is due in the second quarter of 2022 but is still far away from completion.

The project’s Detail Engineering Survey has been completed, while the acquisition of land from the concerned districts, and payments related to the NHA and Pakistan Railway are both underway. The requisite funds for the project have been allocated in Budget 2021-22 and the first installment of Rs. 365.723 million for FY 2021-22 was released to the SSGC on 20 September 2021.

The project for the supply of 40mmcfd gas to the Allama Iqbal Industrial City SEZ in Punjab is due to be completed in October 2022 at a cost of Rs. 785 million. A detailed survey and engineering of the project have been completed. Also, a line pipe has been received and site activities commenced on 1 December 2021. Section-4 of the proposed ROW land passing through two districts (Faisalabad and Chiniot) for acquisition has been approved, and the land cost has been deposited into the Government Treasury. Meanwhile, the physical progress of the project is 34 percent.

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Rashakai SEZ in Khyber Pakhtunkhwa is the only zone where 99 percent physical progress has been achieved on the supply of 30 mmcfd gas.

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