The Economic Coordination Committee (ECC) of the cabinet, the highest economic decision-making authority, is taking up the LNG import project in its meeting on Tuesday. A contract for the import of 3.5 million cubic feet (mmcf) of gas per annum has become a bone of contention between the ministry of petroleum and natural resources and the law ministry after the Supreme Court directed the government to reconsider the deal.
After the SC judgment, prompted by reports of alleged corruption in the deal, the ECC asked the law ministry to evaluate the proposed contract.
The petroleum ministry once again proposed awarding the contract to 4Gas company, a move opposed by the law ministry that was of the view that the petroleum ministry’s summary was flouting the SC judgment. After that the petroleum ministry has proposed to the ECC to either award the contract to 4Gas or invite fresh tenders.
Sources close to Finance Minister Dr Abdul Hafeez Shaikh said that the minister has decided to endorse the law ministry’s opinion. In a last ditch effort to save the deal, the country head of 4Gas, Mustafa Kamal Kazi, held a meeting with the finance minister a few days ago but could not convince him. He was told that the issue would be taken up at the ECC.
“4Gas does not understand why the law ministry has advised re-tendering of the project; 4Gas and its legal advisers are of the opinion that there is no legal ground for that,” said an official spokesman for the company.
He said fresh tenders would take at least another two years with the chance of not attracting any serious offers, therefore re-tendering may not find an immediate, robust and economical solution to the energy crisis. In the views of the secretary petroleum, the whole process of awarding the contract after inviting fresh tenders may take six months.
Age limit for imported cars
The ECC will also take a final decision on another disputed issue of enhancement of age limit for the import of used cars from three to five years. The ECC on December 8 decided to relax the age limit from three to five years in the face of increasing prices of local brands. However, the decision was reverted back at the interference of Prime Minister Yousaf Raza Gilani. Reportedly, the ECC in its last meeting objected to the PM’s intervention in a decision taken by a competent forum.
Gas supply to fertiliser companies
According to another proposal, the ECC has been asked to restore gas supply to the fertiliser sector on the plea that it will produce 250,000 tons of urea for meeting the needs of the Rabi season. On December 27, gas supply to the fertiliser sector was cut for 45 days in the wake of its shortage. However, the industries ministry summary is silent about the negative impact of restoration of gas supply for power companies and domestic consumers.
The country is experiencing a shortage of over one billion cubic feet per day of gas. Average per day fertiliser sector’s gas consumption is 150 million cubic feet, according to the Integrated Energy Sector report of the Friends of Democratic Pakistan.
Published in The Express Triune, January 25th, 2011.
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