Gilani orders inquiry into LNG scandal

Prime Minister Yousaf Raza Gilani has ordered an inquiry into the alleged irregularities in the award of LNG import contract.


M Zia Khan June 20, 2010

ISLAMABAD: Prime Minister Yousaf Raza Gilani has ordered an inquiry into the alleged irregularities in the award of contract to import Liquefied Natural Gas (LNG), a deal cancelled by the Supreme Court (SC) earlier.

An official statement released by the prime minister’s office said that the prime minister has directed the establishment division to “propose a high-powered inquiry committee” to probe the multi-billion-dollar deal.

The to-be-constituted committee, the statement added, will probe the “allegations of illegalities and fix responsibility” with regards to the awarding of the contract.

The SC, in April, scrapped an official deal to buy LNG from a French energy company over suspected irregularities.

The SC said that the petroleum ministry had not followed proper procedures and decisions of the Economic Coordination Committee (ECC) in February and therefore the awarding of the contract to France’s GDF Suez “shall be of no consequence.”

The SC took up the case after media reports that Pakistan had lost $1 billion when senior petroleum ministry officials ignored the lowest bid by Fauji Foundation, an investment group run by former Pakistani military officers and European company Vitol, and chose GDF Suez. “This case has been disposed of with the hope that the matter will be handled more transparently,” Chief Justice Iftikhar Chaudhry said in his decision. The SC had ordered the government to initiate an official inquiry into the scam to find who was behind the deal that could have caused the treasury huge losses.

“We are constrained to make observations that the officers and functionaries responsible for the contract are required to be dealt with in accordance with the law and we hope that the prime minister of Pakistan shall probe into the matter accordingly,” the bench said in its verdict.

The ECC was presented a summary which contained the proposals of Shell and French firm GDF but not of the Fauji Foundation.

The ECC had approved to award a deal to the French firm. Managing Director Fauji Foundation approached the then chairman ECC, former finance minister Shaukat Tarin, who had publicly announced that the petroleum ministry had kept him in the dark over the deal by not presenting the “complete picture.”

COMMENTS (1)

Roman Kazmin | 14 years ago | Reply Well, a very interesting angle indeed. What the writer fails to note, however, is that one of the key ingredients in supplying a terminal with LNG is having production capacity--which neither Vitol or Fauji Foundation has (unlike GDF Suez).
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