PTI govt irked by delay in finalising LNG terminal site

Delay caused by previous government’s move to scrap bidding allegedly in favour of one company

ISLAMABAD: The Pakistan Tehreek-e-Insaf (PTI) government has expressed dismay over inordinate delays in decision-making to identify a suitable site for the third LNG terminal.

The delays were caused by the previous Pakistan Muslim League-Nawaz (PML-N) government’s move on the last day of its tenure to scrap the competition process to favour one company. The Economic Coordination Committee (ECC) expressed dissatisfaction with the delays in a recent meeting.

On February 23, 2018, the Port Qasim Authority (PQA) under Chairman Najaf Mirza initiated bidding for a location at PQA to set up a third LNG terminal. In a meeting of technical committee comprising the PQA DG Operations and other officials, chaired by Mirza, it was noted that Elengy and Energas had suggested different locations for the terminal. As such, it was decided that PQA should give a single point location for the competition, which should be feasible and safer from a navigational/channel point of view.

Energas appreciated the decision and consented to participate in the competition under site B and the terms and conditions offered by PQA. However, Elengy objected and insisted a site be allocated to it on a first come first served basis.

Following this development, the Ministry of Maritime Affairs stopped the process and bidding was suspended accordingly. A three-member committee, comprising the then prime minister’s principal secretary, the senior joint secretary of the maritime affairs ministry and the PQA chairman, was constituted by the Cabinet Division.

In a report submitted to the PQA board of directors, a copy of which is available with The Express Tribune, Planning DG Dr Kazim Hussain Jatoi, who was then also acting as PQA DG Technical, said in keeping with the committee’s recommendations, the cabinet in a meeting on the last working day of the then government decided to scrap the bidding process.

The reason given was that site B had been deemed risky. The cabinet decided to allocate a location from three safer sites - A, C and D - on a first come first served basis under the 2011 LNG Policy to give preference to Elengy. Certain other conditions put during competition were also scrapped.

Jatoi further informed the board that he was not kept in the loop in all correspondence with the federal government on the matter and that all consultations bypassed Technical DG’s office. It is also worth mentioning that then government removed Mirza as PQA chairman and brought in Asad Chandna in his stead on May 3, 2018. Just 18 days later, Chandna drafted a highly technical document on site allocation without consulting the PQA technical team. He tasked Pakistan LNG Terminals representative Muhammad Asad with preparing this paper, which justified the cancellation of the bidding process.

After criticism from different quarters, the PQA board started investigating the matter and now asked the authority’s chairman to send show cause notices to relevant departments. The PQA Technical DG responded to the notice on March 11, 2019.

Published in The Express Tribune, March 29^th, 2019.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.