The Pakistan Muslim League-Nawaz (PML-N) demanded a fair probe into a controversial deal between the government and various international firms to acquire reserves of gold, copper and silver in Balochistan, during the Senate question hour on Friday.
It was reported that an international firm, which was awarded a contract, claimed $5 billion on account of damages. The firm sought help from international arbitrators to recoup damages from the Pakistani government, which, according to the company, had violated the agreement.
Leader of the Opposition in the Senate Ishaq Dar said, “There is some kind of fishy dealing in the agreement involving Reko Diq and Saindak projects. We demand a fair probe into the whole situation, which may cost billions of dollars to the national exchequer.”
During the session, Dar further inquired as to who should be held responsible for the dealing in natural resources. He added that the issue must be discussed in the meeting of the Council of Common Interest (CCI).
Pakistan Muslim League-Quaid (PML-Q) Senator Robina Irfan also seconded Dar and spoke at length about the controversial deal concerning reserves of over 1,400 tonnes of gold in the two projects involving foreign firms.
“The government should publicly bring out the dealings between the Chinese firms and itself involving precious metals, particularly those that were mined at Chaghai,” she insisted.
The Tethyan Copper Company — a joint venture between Chile’s Antofagasta and Canada’s Barrick Gold — had projected that the mine in Chaghai would produce at least $60 billion based on long-term copper and gold prices of $2.2 per pound and $925 per ounce, respectively. It had also estimated that the mine would be worth almost $120 billion, with Balochistan getting a quarter of the share after operating costs were recovered.
Adviser on Petroleum and Natural Resources Dr Asim Hussain informed the House that discoveries of gold and silver have been reported from various parts of the country including Balochistan, Gilgit-Baltistan and Khyber-Pakhtunkhwa.
There are estimated 1,339 tonnes in reserves of gold in Saindak and Reko Diq projects. Gold reserves in Saindak are around 63 tonnes with over 74,707 tonnes of silver reserves, Dr Hussain told the House. He said, “Mining in these projects is at a halt because the international firms and the government of Pakistan are being litigated in various courts over the mining deals.”
Issuing of TFC
The Senate was also informed on Friday that the government of Pakistan had imposed a ban on setting up new CNG stations in the country since February 6, 2008. The ban was lifted on August 8, 2008 for Balochistan, however, and reinstated on October 4, 2011. The adviser said that 38 CNG stations were set up in Balochistan in that period.
Responding to a question, Dr Hussain clarified that the Oil and Gas Development Company Limited (OGDCL) has not issued any Term Finance Certificates (TFC) to raise funds to tackle the circular debt. He said that efforts to resolve the circular debt have been under way for quite some time.
On the other hand, the Ministry of Water and Power submitted a summary to the Economic Coordination Committee proposing a partial resolution to the energy sector’s circular debt crisis. The TFCs are to be floated by either the Pakistan Electric Power Company (Private) Limited (Pepco) or the Power Holding (Private) Limited for Rs82 billion.
Published in The Express Tribune, July 14th, 2012.
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