SC stays award of Rs4,600 billion LNG contract

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ISLAMABAD: The Supreme Court on Monday stayed the process of awarding $46 billion (Rs4,600 billion) contract of Liquefied Natural Gas (LNG) till its final decision and directed the parties concerned to file their replies by March 18, 2013. A three-member bench of the apex court, comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Gulzar Ahmed and Justice Sheikh Azmat Saeed, heard the suo moto taken on the note of the SC Registrar and the press clippings.


The court stayed the proceedings at all the forums for awarding the Liquefied Natural Gas (LNG) contract till the final judgment of the case. “Prima facie, we are of the opinion that the Ministry of Petroleum, Finance and Economic Affairs adhering to our judgment could have followed a transparent manner in awarding of the contract,” the chief justice ruled in his order.


Counsels for the parties, however, submitted that transparency was the main consideration for the ministries.During the course of hearing, counsel for Ministry of Petroleum and Natural Resources, SSGC, Secretary Ministry of Finance, Managing Director PPRA and representative of Engro Pakistan appeared before the bench and sought time for filing the reply.


The court issued a notice to Secretary Economic Affairs and former chairman SSGC Waqar A Malik as they could not appear in person or represented through their counsels.


In a 2010 judgment regarding a huge loss to the public exchequer by ignoring the lowest bid of Fauji Foundation and Multinational Energy from Vitol for awarding the LNG contract, the court observed that the Ministry of Petroleum and Natural Resources and SSGCL had not followed proper process for awarding the contract for LNG supply by Mashal Project.


During the proceedings, the court said that according to the media, the ECC had failed to take a decision on the award of a multi-billion dollar contract for the import of 400 million cubic feet of LNG and left the matter to the federal cabinet to take difficult decisions. An immediate meeting of the federal cabinet was likely to be convened early next week to resolve the controversy after some members of the ECC questioned the summary submitted by the Petroleum Ministry to declare the Pakistan Gasport consortium as the lowest bidder by pronouncing another bidder as non-compliant.


Addressing Anwar Mansoor, the counsels for SSGC and Salman Akram Raja, the counsel of Ministry of Petroleum, the chief justice observed, “The present government has successfully completed its tenure, therefore, don’t put the incumbent cabinet into trouble and let the next government decide the matter.”


Waqar A Malik, Chairman of the SSGC Board, had tendered his resignation on March 7, 2013 after the board was asked to declare the Gasport Consortium as successful bidder. He said that even though Engro Terminal had quoted two separate benchmarks for the LNG import price, its final bid price calculated by the SSGC’s bid committee was on the lower side when compared with Gasport.

The court noted that a sub-committee appointed by the ECC to investigate the previous non-professional handling of the LNG import bidding had not completed its job and had instead got itself involved in the fresh bidding that was not its mandate.


During the proceedings of the case, the chief justice asked the SSGC counsel as to why his client was in a hurry. But Anwar Mansoor replied that they were not in a hurry and not processing the contract at the moment. He, however, sought time to file a detailed reply. Meanwhile, the court on the request of parties concerned adjourned the hearing till March 18.

Courtesy:  The News

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