ISLAMABAD: The government's $20 billion flagship project for import of 500 million cubic feet per day (mmcfd) of liquefied natural gas (LNG) has been challenged again in the Supreme Court.
Filed by Agha Zafar Hilali, a former ambassador and former prime minister Benazir Bhutto's special secretary, the petition accused the government functionaries of holding 'clandestine negotiations' with a Turkish firm for 'personal gains' in violation of the country's public procurement rules.
The petitioner has sought contempt of court proceedings and penalties against federal secretaries of the ministries of law, petroleum, and water and power and incumbent and former managing directors of the Sui Southern Gas Company for wilfully breaching and disregarding the court's orders. He requested the court to stop the respondents from going ahead with the process.
Mr Hilali said the Netherlands-based 4Gas company had followed a legal process under procurement rules for five years to have been selected for setting up the re-gasification terminal with 3.5 million tons per annum of LNG import capacity to supply 500 million cubic feet per day at Port Qasim.
But instead of carrying forward the five-year PPRA-compliant Mashal LNG project which had consumed $600,000 of public money according to the apex court ruling, the respondents “worked independently as well as with a view collectively to scrapping the project tender”.
The petition said the respondents were now considering seeking special waiver of the Public Procurement Regulatory Authority (PPRA) rules from the prime minister for the new process for import of LNG which would further delay the much-needed imported gas and complicate matters unnecessarily given the vested rights of 4Gas --the developer declared qualified by the SSGC's consultant -- and cause further loss to exchequer.
The petition said that 4Gas's rights in the project had neither been challenged nor the company was a party to the referenced case or asked to be represented in the matter. In any event, there was no adverse finding about the Mashal project or allegation of any wrongdoing against 4Gas.
“Therefore, scrapping the project is tantamount to arbitrary action against 4Gas in utter disregard of the apex court's orders.”
The petition alleged that after the Jan 25 decision against a separate short-term LNG import project, the government functionaries “in clear contravention of the rule 40 of the PPRA rules have held direct clandestine negotiations with a private Turkish entity in connection with the import of LNG and establishment of LNG terminal”.
It said that shortly after the negotiations, the SSGC managing director issued on May 24 advertisements in national dailies inviting expression of interest for LNG supply and establishment of LNG import terminal, which constituted another contempt of court.
Mr Hilali said that strangely another advertisement of the Environmental Protection Agency (EPA) was issued on May 28 for a public hearing in connection with the Turkish entity's environmental impact assessment application in respect of the LNG terminal at Port Qasim.
“Such public hearings are only held by a project developer during the advanced stages of project development, and not before the expiry of the deadline for submission of EOIs. That this Turkish entity, which is chosen by the GoP to develop the LNG terminal, has taken such a step so prematurely is demonstrative of the assurances of success it must have been given by the GoP functionaries even before the formal tender documents have been issued, what to talk of prequalification, process of inviting bids, submission of bid and actual bidding,” the petition said.
When contacted federal Minister for Petroleum and Natural Resources Dr Asim Hussain said he had not seen the petition and would comment on it after going through its contents.
“However, nobody has stopped 4Gas from LNG import. In the new project, SSGC is acting as a third party facilitator and the government has nothing to with the import project,” he added.
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