SSGC stopped from extending JJVL’s contract


ISLAMABAD – The National Assembly Standing Committee on Petroleum on Tuesday directed the Sui Southern Gas Company (SSGC) not to extend the contract for setting up the Jamshoro Joint Venture Limited (JJVL) liquefied petroleum gas (LPG) plant, after observing that LPG quotas were granted illegally.
The meeting was held under the chairmanship of Sheikh Waqqas Akram. Convener Barjees Tahir presented the report of the sub committee that investigated the grant of LPG quotas to various companies. The committee adopted the report after deleting two paras from the report that mentioned malpractices in the PPP government of 1989. The report said SSGC awarded the contract for setting up JJVL to only one bidder, who even failed to submit the bid bond.
SSGC Managing Director Faizullah Abbasi said the tenders were issued in 2001 and six companies were pre-qualified, but the bidding was extended twice and the board of directors approved the single bid in September 2001. He said the company only received Rs 2 billion royalty from the project in the last five years. Akram asked him to explain if a bid submitted without the bid bond could be accepted, on which the SSGC MD said such a bid automatically stood rejected. Legal Head of the SSGC, Yousaf Ansari, told the committee that the bid bond of Rs 6.4 million was submitted two days after bidding ended.
After establishing that the award of contract was biased, the committee chairman directed officials to furnish details of officials of the OGDCL, the Ministry of Petroleum and SSGC involved in the award of the contract. He said JJVL tender commenced in 2005 and it was written in the contract that it would be renewed in 2011 on the same rates without holding new bidding. He directed the SSGC that the renewal of the contract, due on February 3, should be put on hold. The MD tried to explain that the renewal of the contract was possible only if the SSGC managed to get a fresh gas sale agreement signed with the company taking over the assets of BP. However, he conceded that the matter was subjudice, as the determination of the Competition Commission of Pakistan (CCP) was challenged in the Lahore High Court. He assured the committee that they would follow the orders of the court. CCP Chairman Rahat Kaunain Hassan informed the committee that they had already instructed their lawyers to ask the court to restraint SSGC from renewing the contract. She said contract could only be renewed under the PPRA rules and CCP Act.