Karkey brought its ship-mounted power plant to Karachi in November 2010, but later in March 2012 the Supreme Court cancelled all rental power project (RPP) contracts, saying they lacked transparency. PHOTO: FILE
ISLAMABAD:
Prime Minister Nawaz Sharif‘s visit to Turkey this week has once again brought to the fore a multi-million-dollar legal dispute between Pakistan and Turkish energy firm Karadeniz Holding’s subsidiary Karkey.
According to a statement issued here by a public relations firm hired by Karkey, the long-running legal dispute involving Karkey and Pakistan authorities has undermined the prospect of enhanced bilateral cooperation in energy between Islamabad and Ankara.
Since April 2012, four of Karkey’s vessels including two power ships – floating power plants – and Turkish crew numbering 30 have been under detention by government authorities in national waters, it said.
Karkey brought its ship-mounted power plant to Karachi in November 2010, but later in March 2012 the Supreme Court cancelled all rental power project (RPP) contracts, saying they lacked transparency.
Prime Minister Nawaz Sharif arrived in Turkey on Monday for a three-day official trip, his first since taking over reins of the country in June, in an effort to woo Turkish investors into Pakistan. According to news reports, the premier was expected to sign eight economic cooperation agreements with his Turkish counterpart and sought a $300 million credit facility from Export Credit Bank of Turkey.
In discussions pertaining to energy supply, Sharif was expected to try to reach a framework agreement with Turkey on power generation and distribution, as well as an enhanced cooperation agreement between state-owned oil and gas companies of the two countries.
Failing to reach an out-of-court settlement, Karkey has taken its case for compensation and damages to World Bank-affiliated International Centre for Settlement of Investment Disputes (ICSID) in Washington DC. First hearing took place on Monday this week, the same day when the prime minister reached Turkey.
During the hearing, the arbitration tribunal asked questions from both parties to the dispute and decided that final hearing on provisional measures would be held on October 8, just nine days following submission of defence arguments by Pakistan counsel on September 29.
The tribunal arrived at the decision primarily because of consensus on the need for immediately making progress on provisional measures as requested by Karkey.
“Increased economic cooperation between Turkey and Pakistan is in both countries’ best interest. This unnecessary dispute has clouded the climate for bilateral cooperation and damaged investor and business confidence,” a Karkey spokesman said. “We hope it can be settled quickly and fairly, preventing it becoming an obstacle to successful future Turkish collaboration with Pakistan in the energy and other sectors.”
Published in The Express Tribune, September 19th, 2013.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
COMMENTS (1)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
Was PM's office not aware of the dispute and date of hearing. Did Pakistan hire PR firm in Turkey prior to the visit of PM. Pakistan has to start living in 2013 ....this is not 1980s 0r 1990s.