$20b LNG project’s contract remains in limbo

Published: December 24, 2010

Petroleum ministry insists that contract be given to same consortium.

ISLAMABAD: A deadlock persists as the Petroleum Ministry has still not started a fresh bidding process for the awarding of a $20 billion LNG contract, and remains adamant to give the project to a controversial global consortium.

The Petroleum Ministry and the Ministry of Law have been involved in a duel over the awarding of the LNG contract that was cancelled back in March by the Supreme Court due to the irregularities reported in the deal.

Minister Naveed Qamar wants to award the deal once again to GDF-Suez, which is against the orders of the Supreme Court but Law Minister Babar Awan is refusing to budge.

The multi-billion dollar LNG scam surfaced in March this year after it was found that a French party, GDF-Suez, a partner of 4Gas company/Carlyle, was given the $20billion deal despite the fact it had never participated in the bidding process. Chief Justice Iftikhar Mohammad Chaudhary had taken suo motu notice of this and after a month-long trial had ordered the Ministry of Petroleum to cancel the deal. The petroleum ministry then sent a summary to the Economic Coordination Council (ECC), once again selecting GDF-Suez for the contract. But Abdul Hafeez Shaikh who heads the ECC referred the matter to the law ministry which subsequently ordered that a fresh bidding process be initiated to ensure transparency.

In a bid to make Law minister Babar Awan fall in line to endorse  the fresh deal, American and French diplomats had held meetings with him to clear the deal, sources said. But Awan refused. According to sources, petroleum minister Naveed Qamar approached Prime Minister Yousuf Raza Gilani and President Asif Zardari to put pressure on Babar Awan, but he again refused to give move from his stance.

An interesting bit of information shows that the Carlyle Group, a global partner of GDF-Suez was indicted in New York in 2009 for paying $13 million in bribes to political fixers to get large contracts.

According to information available to The Express Tribune, certain papers about to be tabled before the ECC, mostly comprising news cuttings of New York Times, Reuters, ABC channel and other international news sources, will give details of the bribes as well as the indictment.

No one was aware the Carlyle group, well known for its links with former US president George W Bush was behind this LNG deal till recently Naveed Qamar disclosed to the media that Carlyle Group had given a notice to the government of Pakistan that their interest in this project was only up till November 30, 2010. Naveed Qamar further said, “The deadline has already passed and before contacting Carlyle we intend to have a discussion in the ECC to decide one way or the other on how the project is to be dealt with. Based on what the ECC decides, we will move forward.”

Officials also told The Express Tribune the revelation that the Carlyle Group is backing GDF-Suez provides some answers as to why the petroleum ministry is so keen on awarding the contract on the original terms, and not follow the directives of the law ministry or the Supreme Court. Interestingly, Olivier Sarkozy, half-brother of President of France Nicolas Sarkozy is co-head and managing director of Carlyle Groups global financial services division, which has huge stakes in the $20billion LNG deal.

Published in The Express Tribune, December 24th, 2010.

Reader Comments (3)

  • moeed
    Dec 24, 2010 - 9:09AM

    amazing another addition to the tales of corruption well i am not shocked i think have got quite used to it nowRecommend

  • Dec 24, 2010 - 4:20PM

    well done ETRecommend

  • hassan
    Dec 24, 2010 - 7:15PM

    hmmm good.Recommend

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