Foreign push for controversial LNG deal builds

Increased pressure to accept a ‘new’ summary that awards the multi-billion dollar contract to the same firm.

ISLAMABAD: In a joint effort, the United States and France have begun piling pressure through official channels to push the top brass of the federal ministry of law to withdraw its legal opinion seeking the re-advertising of a controversial $20 billion LNG contract that was initially awarded to a French company.

The contract, awarded to GDF-Suez, was to be revised in line with instructions of the Supreme Court  following its suo motu notice of a report regarding the irregularities in the contract awarding process.

After going through the official summary of the ‘new’ proposed deal, once again looking to award the multi-billion dollar contract to the same French company, the law ministry refused, point blank, to clear it – instead recommending the Economic Coordination Committee (ECC) to direct the petroleum ministry to re-advertise the whole contract. The summary had been sent to the law ministry by the petroleum ministry for comments.

However, despite the law ministry’s opposition, the ECC has been given till November 30 by the authorities of the ministry of petroleum to approve the deal.

Moreover, with the law ministry refusing to budge from its position of opposing the contract, the extraordinary pressure has begun from the outside. In unprecedented official communications, the government of Pakistan has been told in clear words through official channels that the  US government is fully behind this project and the Pakistan government has to act and make sure that the project is put through.

The official documents, available with The Express Tribune, reveal that both the prime minister’s and president’s secretariats have jumped into the fray to back desperate efforts of the French and US governments to make the law ministry fall in line and revise its legal opinion.

The rationale of re-advertisement was  to ensure transparency in the light of the instructions of the Supreme Court’s three-member bench presided by Chief Justice Iftikhar Mohammad Chaudhry given on April 28 this year.

France is said to be so desperate to get the lucrative LNG deal that the French ambassador to Pakistan held a meeting with Law Minister Dr Babar Awan, and asked him not to put hurdles in the way of clearance of the multi-billion dollar LNG deal, which has been pending for the last six months.

Fresh pressure on the law ministry began after the chairman of the Board of Investment (BoI) decided to directly approach President Asif Ali Zardari and Prime Minister Yousaf Raza Gilani on the issue. Both the president and prime minister sent official letters to the law ministry for “appropriate action”. In his letter, the BoI chairman wrote that, “I have been receiving telephone calls/emails from Mr Robert B Drumheller, vice president Overseas Private Investment Corporation (OPIC), who has funded the project and advised me that they and the USA government are fully behind this project and the government of Pakistan, has to act and make sure that the project is put through”.

He further wrote that the, “project has come to ECC several times and has not been approved due to some reasons or the other. I feel the project of national importance needs your attention, which is the need of our government.”

The BoI chairman advised the president and prime minister to hold a meeting with both Petroleum Minister Naveed Qamar and Dr Babar Awan to resolve this issue at the earliest so as the project can be approved in the next meeting.

Earlier, the Supreme Court had taken suo motu of the awarding of a $20 billion LNG contract to GDF-Suez, which had not even participated in the bidding process. During the court proceedings, it was established that petroleum ministry bosses had seriously violated the rules and regulations governing such big deals.

Government officials, through their lawyers, confessed before the court and agreed to revise the deal. The SC, in its detailed judgment, also directed the prime minister to order an inquiry into the matter and punish the petroleum ministry officials involved.

However, petroleum ministry bosses surprisingly once again recommended the same firm, GDF-Suez, for the contract. Not a comma or full stop was changed from the previous summary. However, Chairman ECC Dr Hafeez Shaikh sought the comments of the law ministry before giving his approval. The law Ministry in its legal opinion said it would be against the rules to recommend GDF-Suez again.

Sources said that the petroleum ministry bosses continuously refused to heed to the opinion and took the matter to the ECC again and again. The petroleum minister first approached the prime minister to put pressure on the law minister so the project could be approved from the ECC.

The prime minister himself had told this correspondent recently that Naveed Qamar had repeatedly asked him to talk to Awan to revise his legal opinion, but added that he had not obliged him.

Subsequently, Qamar directly contacted the president, who agreed to speak to the law minister. Awan is said to have brought the whole situation into the notice of president, and said that they all would once again face legal trouble if SC took fresh notice of the deal, which was being inked without following the set criteria.

The latest twist in the saga is that foreign governments are now directly approaching the concerned quarters to make the law ministry fall in line.

Published in The Express Tribune, November 20^th, 2010.