Investment minister challenges 30-year Engro Vopak lease extension, seeks ECC review

Investment Minister Qaiser Sheikh has challenged the Economic Coordination Committee’s (ECC) decision to grant a 30-year lease extension to Engro Vopak Terminal Limited (EVTL), arguing that the move violates public procurement rules and could hinder competition in the petrochemical sector, The Express Tribune reported. 

In a letter addressed to ECC Chairman and Finance Minister Muhammad Aurangzeb, Sheikh objected to the extension and protested that his reservations were not recorded in the minutes of the ECC meeting held on June 5, where the proposal was approved.

The Investment Minister said he had formally written to the ECC and that the matter was expected to come up for discussion again. He added that the federal cabinet had referred the issue back to the ECC following his objections.

The development comes days before the expiry of EVTL’s existing 30-year build-operate-transfer agreement with Port Qasim Authority (PQA), which was signed in 1996 and is due to end this week.

According to Sheikh, the company's unsolicited proposal for an extension does not meet the criteria of being “unique and innovative” under Rules 2(1)(ka) and 37-A of the Public Procurement Regulatory Authority (PPRA) Rules, 2004.

He maintained that granting another 30-year term without competitive bidding would provide an undue advantage to the incumbent operator, create a monopoly and undermine the development of Pakistan’s petrochemical industry.

The minister also stated that both the PPRA framework and a PQA in-house assessment committee had concluded that the proposal did not qualify for exemption from competitive bidding requirements.

Official records show that PQA began discussions on a possible extension, as required under the original agreement, but failed to reach a consensus. In 2021, the PQA Board declared negotiations closed and directed that a competitive bidding process be initiated through the appointment of a consultant.

In 2022, EVTL submitted an unsolicited proposal seeking an extension. However, a PQA committee concluded that the proposal was neither unique nor innovative and therefore did not qualify under PPRA rules.

Subsequently, the government reopened negotiations with the company while continuing work on a competitive process. Amendments were made to the implementation agreements, and both sides later agreed on terms for a further 30-year extension, which was approved by the PQA Board and subsequently endorsed by the ECC.

Government officials said there is now a possibility that the ECC may revisit its earlier decision in light of the objections raised by the investment minister.

EVTL handles more than 60% of Pakistan’s bulk chemical imports and around 55% of marine liquefied petroleum gas (LPG) imports, making it one of the country's key energy and petrochemical infrastructure facilities.