Paksat-IR ground control segment project agreement to be amended

The government is to amend the agreement signed with China on the concessional loan for Paksat-IR ground control segment project, in the light of proposals of Law Ministry, sources close to Secretary Economic Affairs Division (EAD) told Business Recorder.
Giving the details, sources said that the life of Pakistan's communication satellite is likely to expire in 2011. To replace it with new equipment, a project, titled 'Pakistan Communication Satellite System' (PAKSAT-IR) has been initiated. The project has following two segments: (i) Satellite segment; and (ii) ground control segment. For financing of the satellite segment, a concessional loan agreement of $189 million was signed with Export/Import Bank of China on October 15, 2009.
The second component--ground control segment costing $14.898 million--includes foreign exchange component (FEC) of $12.663 million which is also to be funded with Chinese concessional loan. The Executive Committee of National Economic Council (Ecnec) approved this project in its meeting held on March 30, 2009.
Both segments ie satellite segment and ground control segment are included in approved PC-1 of the project. MOFCOM forwarded draft inter-governmental framework agreement on May 28, 2010. EAD secured concurrence of Finance Division and Suparco to the draft agreement. However, Law and Justice Division proposed the following change:
"The President of Pakistan through Economic Affairs Division, Government of Pakistan" instead of "the Government of the Islamic Republic of Pakistan". Sources said that in the light of the advice of the Ministry of Law, the Chinese side was requested to amend the draft.
However, the Chinese side declined to incorporate the proposed change for the reason that all previous framework agreements of provision of concessional loan by China to Pakistan, including that for Paksat-IR satellite system project, were signed between the Government of the Islamic Republic of Pakistan and the Government of the People's Republic of China, without mentioning "The President of Pakistan".
In May 2010, Ministry of Foreign Affairs as well as the Chinese embassy indicated that this agreement was expected to be signed during the Chinese Vice Premier's visit to Pakistan, scheduled for 9-10 June, 2010. For signing the inter-governmental agreement, approval of the Cabinet was required under Rule 16(I)(h) of the Rules of Business 1973. However, due to paucity of time and to facilitate the signing of the agreement during the high level visit from China, EAD moved a summary to the Prime Minister seeking approval of the following: (i) Overrule the objection of Law Division and allow signing of the agreement on the earlier format and (ii) grant permission under Rule 16(2) of the Rules of Business 1973 to sign the framework agreement.
According to sources, the Prime Minister approved the proposals and directed Economic Affairs Division to subsequently place the matter before the Cabinet, including the observations of the Law Division on the format of foreign agreements to be followed in future.
Sources further stated that inter-governmental framework agreement was signed on June 9, 2010 and EAD reiterated its request to the Chinese side to amend the existing format of framework agreements as per observations of the Law and Justice Division. The Chinese side has now agreed to amend the format of inter-governmental framework agreement in line with the change proposed by the Law Division.