ISLAMABAD: Pakistan LNG Terminal Company (PLTC) has imposed another penalty worth $20 million on Pakistan Gas Port Consortium (PGPC) due to the violation of agreement as PGPC has failed to meet the deadline of making its Liquefied Natural Gas (LNG) terminal operational, said sources.
Well-informed sources disclosed to Pakistan Today that PGPC was due to complete the construction of the LNG terminal on a second deadline of 28 November 2017 and make it completely functional. However, it miserably failed in meeting the deadline. They said that PLTC has so far imposed $50 million worth penalties on PGPC, led by the Prime Minister’s friend and mogul Iqbal Z Ahmed.
However, influential shareholders of PGPC including energy tycoon, Iqbal Z Ahmed are not willing to pay $50 million in penalties to PLTC over delays in the operations of the second LNG terminal at Port Qasim, said sources.
They added that PGPC is ready to pay only $1.5 million in penalties on said charges and the influential shareholders of PGPC are leaving no stone unturned to get relaxation in the amount of penalty.
“Services of a consultant currently engaged in the office of Attorney General of Pakistan (AGPR) are being utilised by PGPC to pave the path towards getting an immunity or relaxation in the million dollars penalty imposed by PLTC,” said the sources.
Earlier, former managing director of PLTC, Azam Soofi had imposed $30 million in penalty on PGPC on 25 September, 2017 due to undue delays in the operation of Pakistan’s second LNG terminal. Soofi imposed a $30 million penalty under LNG Operation and Services agreement and refused to withdraw the penalty. And, on finding no from Soofi, Prime Minister Shahid Khaqqan Abbasi reportedly got him removed from the top slot of PLTC.
“That is outright illegal to waive the penalty which has been applied under the terms of the contract and under the laws of Pakistan,” said Azam Soofi in a letter to PLTL Chairman Asim Murtaza.
Available copies of documents transpire that PGPC could not make operational the LNG terminal on 30 June 2017 as per agreement. Upon this, PGPC had given a written assurance to PLTC that terminal will be operational till September 25, 2017.
Finding a failure in meeting the deadline set for the operation of second LNG terminal of PGPC, PLTC led by Azam Soofhad I had imposed $30 million penalty on PGPC on 25 September 2017.
It is also learnt that Finance Minister Miftah Ismail has approached Azam Soofi on the advice of premier Abbasi in an alleged bid to get favour for PGPC. However, after finding no from Soofi, PM Abbasi had got rid of him without giving any reason on 15 December 2017 through a decision of the board of directors (BoD) of PLTC. But, PGPC failed to make the terminal operational November on 28 November 2017 due to technical faults. And, on January 04, 2018, PGPC’s LNG terminal stared operations after removing the faults.
Documents also revealed that PLTC has reviewed the cost it (PLTC) has to bear due to 36 days delay in the operation of the second LNG terminal and imposed $20 million in penalty on PGPC. And, PGPC instead of paying the amount of penalty presented the matter in a dispute resolution committee to get it solved. The dispute resolution committee is comprised of retired Justice Ahmed Irfan Aslam and Justice retd. Tariq Shamim.
According to documents, retired Justice Ahmed Irfan Aslam is representing PLTC and Justice retd. Tariq Shamim is the representative of PGPC in the dispute resolution committee.
Sources also claimed that dispute resolution committee has recommended to charge PGPC with only one million dollar penalty instead of $50 million. They said both the representatives have submitted their signature on the report that asked for one million dollar penalty on PGPC over the delay in the commissioning of LNG terminal.
On the other hand, officials at PLTC said that the company has not received a report from the committee about the matter of penalty on PGC and the issue of $ 50 million penalty is yet to be solved.
It is relevant to mention that PGPC has submitted its response and report along with recommendations of the dispute resolution committee with Islamabad High Court on January 15, 2018, while PLTC has advocated that matter is still under process and final recommendations are not devised so far.
Chairman Pakistan Gas Port Iqbal Z Ahmed said that construction of the second terminal was completed only to strengthen country’s economy at a time when there was a hard time for it. He said there was a delay in the operation of LNG terminal. But, PLTC will have to prove the loss surfaced due to delay in the operation of the terminal. He said PGPC is ready to pay the penalty if it (PGPC) is proved responsible of the loss.
“I will not spend half an hour to pay the penalty if it is imposed in the light of law on the PGPC,” said Iqbal Ahmed.
