No funds transferred to Iran-Pakistan Pipeline project, petroleum ministry tells SC

A high powered project review board shall review the projects proposed by the ministry qualified for funding from GIDC

ISLAMABAD: Despite the collection of Rs295 billion cess inserted through GIDC Act 2015, the ministry of petroleum has informed the Supreme Court that no fund has been transferred to the Iran-Pakistan Pipeline project.

The ministry, while submitting a report in the GIDC case, stated that pursuant to Section 4 (1) of the GIDC Act 2015 read with rules 2, 3 and 4 of the GIDC Utilization rules, cess shall be utilized by the federal government for or in connection with infrastructure development of Iran-Pakistan pipeline project and Turkmenistan-Afghanistan-Pakistan India (TAPI) pipeline project, LNG or other ancillary projects.

A high powered project review board headed by the finance minister shall review the projects proposed by the ministry qualified for funding from GIDC.

TAPI Gas Purchase Agreement (GSPA) was concluded in 2012 under which Turkmenistan will supply 1341 mmscfd gas for 30 years. The estimated cost of the project was $10 billion and as per shareholders’ agreement, Pakistan’s share of equity in the project is estimated at $200 million, which was approved and released to the project company by the finance division out of the funds of GIDC in two instalments.

The report reveals that out of Rs 295 billion, only Rs 482 million has been transferred for the TAPI project. The anticipated first gas flow under phase-1 of TAPI is expected to be in 2023/24. Likewise, no fund has been transferred for the IP project, says the report.

Regarding the IP project, the ministry revealed that working teams are continuously pursuing a viable solution for the implementation of the project in the context of international sanctions on Iran. Considering that there has been no progress in terms of laying of a connectivity network, therefore, no funds have been released for the Iran-Pakistan Pipeline Project.

The ministry also informed the SC that matter remained and is sub judice before various courts of law for a long time; therefore, no utilization report could be placed before the parliament.

Details of pending cases:

Sharing details of GIDC cases, the report says that GIDC Act 2011 was challenged in the high courts. The superior courts struck down the levy. Later, GIDC 2015 was promulgated in May 2015 giving cover to the Ordinance 2014 which also included clause 3 (3) & 8 (1) with respective effect. The effectees of the Act 2015 filed litigations before various high courts and prayed the courts to declare the Act viod ab initio for being ultra vires to the constitution and law. Peshawar High Court dismissed all the petitions in favour of the federal government. The consumers challenged the PHC verdict in the apex court but they failed to get stay order and now the matter is still pending.

Numerous GIDC cases were filed in the Sindh High Court by the consumers. The high court single bench on October 26, 2016, declared GIDC Act 2015 as unconstitutional. Later the federal government challenged the order before the division bench. The case was fixed on October 16, 2019, but the roster was discharged. The Lahore High Court disposed of all GIDC matters with direction to the consumers to approach the high powered committee for the determination of payable GIDC arrears pursuant to section 8 (2) of the GIDC Act 2015.