Federal Cabinet decides to renegotiate LNG deals

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APP72-18 ISLAMABAD: October 18 – Prime Minister Imran Khan chairs meeting of the Federal Cabinet at PM Office. APP

ISLAMABAD, Oct 18 (APP):The Federal Cabinet on Thursday decided to renegotiate the terms and conditions of unjustified deals pertaining to the Liquefied Natural Gas (LNG) terminals with the companies concerned as the national economy was under pressure because of them.
Federal Minister for Information and Broadcasting Chaudhry Fawad Hussain and Federal Minister for Petroleum Division Ghulam Sarwar Khan briefed media persons about the decisions of federal cabinet meeting which was chaired by Prime Minister Imran Khan.
Chaudhry Fawad said the government had already decided to hold an audit of the two LNG deals as the previous Pakistan Muslim League-Nawaz (PML-N) government had played havoc with the national economy by signing such accords.
Ghulam Sarwar said the PML-N government inked two LNG agreements. In one agreement, the return of equity was 44 percent in dollar, which was much higher as compared to international standard, while in the second the return of equity was about 22 percent.
“The return of equity in both the agreements is very high as internationally it is about 18 to 20 percent,” he added.
He said the agreements had a renegotiation clause and the government would use it.“If the negotiation is not successful, the government will utilize other remedies also,” he added.
Ghulam Sarwar said according to the second agreement, the government had to pay about 245,000 dollars per day to the LNG terminal owner . “Even if the second LNG terminal runs below its capacity, the government has to pay 245,000 dollar per day.”
The minister viewed that both the agreements had brought the county’s economy under pressure. The Economic Coordination Committee (ECC) had held three meetings on the issue and today, a comprehensive briefing was given to the cabinet.
The National Accountability Bureau (NAB), he said, was also looking into the LNG cases while the Supreme Court was also examining the same and his ministry had submitted its reply in the court.
He recalled re-negotiation of terms and conditions was held with independent power producers (IPPs) in the past, which had decreased their rates after successful discussions.
Fawad Hussain said under the prime minister’s economic vision, development of Balochistan and Karachi was the top priority of the government.
He said there were complaints that the funds given for the development of Karachi were not properly utilized. Karachi’s transformation into a fully developed city, he said, was an important agenda of the PTI government as it was crucial for the country’s progress. A high powered committee headed by Sindh Governor Imran Ismail had been constituted to ensure proper use of the development funds given by the federal government for Karachi, he added.
The mega city, he said, after a long time had now come out of ethnic politics and it was the responsibility of PTI to come up to the expectations of its people.
He said the provincial government would also be taken on board on the funds released by the federal government for the uplift of Karachi.
Fawad said the federal government had decided to hand over administrative apparatus of tribal areas to the Chief Minister Secretariat in Khyber Pakhtunkhwa by abolishing the Federally Administered Tribal Areas (FATA) Secretariat.
He said the provinces would reduce their share in the National Finance Commission Award to give 3 percent share for the development of erstwhile FATA.
The information minister said the federal government had decided to withdraw its appeal in the Supreme Court regarding automatic weapons licenses. It believed that after the 18th Constitutional Amendment, it had become a provincial issue and they should make their policies keeping in mind their traditions, he added.
He said the Law Ministry had been advised to withdraw the case from the Supreme Court and Minister of State for Interior Shehryar Afridi would hold meetings with representatives of the provinces to chalk out a new strategy.
The minister said the cabinet decided to merge the Earthquake Rehabilitation and Reconstruction Authority (ERRA) into the National Disaster Management Authority (NDMA), as it had almost completed its task of reconstruction after the 2005 earthquake. He, however, made it clear that all its employees would be accommodated in the provincial departments and NDMA, and no one would be terminated from service.
Fawad said the cabinet decided that that keeping in view the farmers interest, sugarcane crushing would start from November 15 instead of November 30 as demanded by mill owners.
He said it was unfortunate that the farmers were exploited by sugar mill owners and middlemen and they were not paid proper and timely price of their produce.The chief ministers of Punjab and Khyber Pakhtunkhaw would meet the prime minister and discuss the issue of timely payment of dues to the farmers, he added.
To a question, he said discussions were continuing with both the International Monetary Fund and friendly counties for provision of $ 12 billion. He rejected the impression that investors were scared by accountability process as transparency in affairs attracted more investment.
To another question about the Wall Street Journal story about Abraaj Capital’s founder alleged offer of $20 million payment to a Pakistani businessman to sell its stake in Pakistan-based K-Electric Ltd through the assistance of then prime minister Nawaz Sharif and his brother Shehbaz Sharif, he said such news were now a routine matter.
To a query about the recent bye-elections, Ghulam Sarwar said they were held in a free, fair and transparent manner as no government machinery was used.
He said, “Both the general election and bye-polls were free, fair and transparent.” He alleged that in the past the PML-N rulers had used government machinery to win the by-elections.