Pakistan wins cases filed by LPG terminal company: Shahid Khaqan Abbasi
London: The government has won both the cases, filed by Progas LPG terminal company, claiming $573 million damages against the former.
“In two separate decisions, the Arbitral Tribunal in London has dismissed both the petitions and asked the company to pay to Pakistan 11 million dollars as expenses of the case borne by the country,” Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi told a news conference here on Wednesday.
The minister further informed that the summary for the provision of 50000 new gas connections had been sent to the prime minister for approval.
“Compared to the previous years, the gas supply to domestic consumers in the upcoming winter will be better,” the minister said, and added, “Currently no plan for increase in gas prices is under consideration.
Replying to a question about case on Reko Diq project in an international court, he informed that out-of-court settlement was still an option with the government.
However, he said that hearing in the case had been completed.
“The government has also submitted new evidences in the case to the court, which will further make the country’s position stronger,” the minister informed.
“Yes, several arrests have been made in Balochistan over the alleged irregularities in awarding the Reko Dig contract and NAB is making further inquiries into the case,” the minister said while replying to a query.
Giving details of the LPG case, Abbasi said that Progas had set up a LPG terminal in 2004, which had been shut down in 2008.
He added that Progas had filed two claims against the government in London.
“The previous government of Pakistan People’s Party (PPP) had not taken interest in the case and did not make any effort to pursue it,” the minister lamented.
“I don’t know why were they so unconcerned about it?” he queried.
Abbasi said that Ali Alawi, brother of the then Iraq’s prime minister, had filed a claim for damages worth $70 million, while other claims had been filed by Progas amounting to $503 million.
He said that Bilateral Investment Treaty (BIT) had been invoked to file the claims.
“The petitioners had claimed that the government of Pakistan had interfered in LPG prices from 2004 to 2008, which made their business unviable,” the minister said, and added, “This was the reason that they had claimed damages of $573 million against the government.
The minister said that the petitioners would have to pay interest on the fine, if they would fail to clear it within 60 days.
“The government has spent $18 to $20 million on this case,” he informed.
Abassi said that former Prime Minister Shaukat Aziz had appeared before the court as a witness and underwent cross examination.
“Not only that, but the then petroleum minister Usman Ameenuddin also testified before the court and passed through cross examination,” the minister informed.
He said the government had regulated LPG prices, and the LPG terminal had turned into a viable entity.
“The LPG import through this terminal has increased by 100 percent, which stood at 0.
3 million metric tonnes during the last three months,” he elaborated.
He further said that licences had also been issued to 11 companies for setting up LPG retail outlets.
Abassi clarified that the government had not taken any decision on gas prices.
“The second LNG terminal would become operational by June 30, 2017,” he said, and added, “However, the terminal operator has assured that it will be ready by June 2017.
He also informed that the operator would have to pay $150,000 per day as a penalty in case of delay.