The board of directors of Sui Southern Gas Company (SSGC) scrapped the tender for the second liquefied natural gas (LNG) tolling terminal on Tuesday, putting an investment of $5 billion at stake after the lowest bidder was found to have submitted fake bank documents.
According to officials familiar with the development, eight board members voted in favour of cancelling the tender and all government nominees supported the Ministry of Petroleum’s stance on the issue.
However, non-government board members voted against cancellation of the bids and took serious notice of the work done by SSGC’s bid consultants, AF Capital, which took a $3 million fee.
Talking to The Express Tribune, SSGC Board Chairman Miftah Ismail acknowledged that the tender had been scrapped following the initiation of litigation.
He said the court case could take a long time, which had not been good for project implementation and therefore the board decided to cancel the tender. “The tender will be floated again very soon.”
According to the officials, SSGC and the Ministry of Petroleum and Natural Resources wanted to award the contract to Akbar Associates, the lowest bidder, but it was found to have submitted fake bank documents in violation of the law.
Despite pressure and lobbying from the ministry, the SSGC board found it difficult to give its seal of approval to the bid submitted by Akbar Associates. “It was the responsibility of the consultants to get all the documents verified,” an SSGC official remarked.
Under the terms and conditions of the tender and the Public Procurement Regulatory Authority (PPRA) rules, SSGC was then required to award the contract to the second lowest bidder, Pakistan Gasport Limited (PGPL).
The decision to cancel the tender runs contrary to the stance taken by SSGC in the Sindh High Court in response to a suit filed by Akbar Associates.
In the court, SSGC said the second LNG terminal was of vital national importance and could not be delayed or cancelled as it could have serious financial implications for both the federal and Punjab governments that were investing about $5 billion in gas pipelines and power plants based on completion of the terminal by December 2016.
“The Ministry of Petroleum is now planning to implement the project through state-owned Government Holdings (Private) Limited,” an official said.
Bids for the second LNG terminal were submitted on January 27.
Only two parties, Akbar Associates and PGPL, technically qualified for the project and their financial bids were opened on May 8.
Published in The Express Tribune, June 24th, 2015.
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