LPG extraction: National Assembly body to discuss SSGC-JJVL deal

The National Assembly Standing Committee on Petroleum and Natural Resources, scheduled to meet on January 19, 2011, will take up the controversial issue of LPG extraction deal inked between Sui Southern Gas Company (SSGC) and Jamshoro Joint-Venture Limited (JJVL), Business Recorder has learnt. MNA Sheikh Waqas will chair the meeting in OGDC head office.
"We have called Petroleum Ministry officials to clarify the LPG extraction deal which binds SSGC to award the contract to JJVL after its expiry in February," a member of the committee said, adding that a report prepared by the subcommittee would be discussed during the meeting.
Sources said that SSGC is being pressured to table a case before the Board of Directors of the company to approve extension of the contract. "We will not become part of any controversy on extension of a deal between JJVL and SSGC after the expiry of the contract in the coming month," one board Member said. Sources said that there was a strong impression among board members of SSGC that Supreme Court might take suo motu action if the contract was extended on the same terms and conditions to JJVL.
The subcommittee has submitted a report to the NA committee after a two-year period. However, the committee is reportedly dismayed over the report and wants to probe JJVL deal with SSGC and other issues of LPG pricing with the objective of providing relief to the consumers. Waqas also has been critical of the deal between SSGC and JJVL and has already said that any contract can become ''null and void'' if mala fide intention is found in the deal.
In its report submitted to NA body on Petroleum, sub body led by Barjees Tahir proposed that the Public Accounts Committee (PAC) chaired by Nisar Ali Khan should take up the matter of LPG extraction contract between SSGC and JJVL. "The government should hold open bidding to award contract of LPG extraction after deal between JJVL and SSGC expires in February 2011," Barjees said during proceedings of the sub body.
The subcommittee had noted that six parties had participated in prequalification process but a single party, JJVL, appeared in the final bid. Subcommittee chairman had observed that SSGC should have conducted re-bidding to create healthy competition and ensure transparency in the whole process.
Subcommittee chairman during the proceedings had also raised the question of awarding the contract to JJVL (a single party final bid) but SSGC failed to respond to this concern. The committee also observed with serious concern that contract was awarded to JJVL without receiving ''bid bond'' which raised question over deal between JJVL and SSGC.
SSGC had submitted to NA sub body that contract was awarded to JJVL on September 12, 2001 without receiving ''bid bond'' which was submitted to SSGC on September 30, 2001. According to first advertisement of the project that appeared in newspapers, SSGC had invited parties with past experience in LPG extraction. But SSGC is silent over committee''s inquiry on JJVL''s any past experience in LPG extraction. The subcommittee has also expressed concern over extension in opening of bids of LPG extraction projects.