Saindak project transfer: Islamabad claims Rs 29 billion from Balochistan

Federal government has claimed a loan of Rs 29 billion against gold and copper Mining Company Saindak Metal Limited (SML) after the decision to transfer it to Balochistan under Aghaz-e-Haqooq-e- Balochistan (AHB) package. SML will be transferred to Balochistan after expiry of mining contract with Chinese company MCC on October 2012.
"We have proposed the federal government to either transfer MSL free of cost to Balochistan or own 10 percent share against investment made in the project," Managing Director (MD) SML, Muhammad Raziq Sanjrani, informed the meeting of the National Assembly Standing Committee on Petroleum and Natural Resources chaired by Sheikh Waqas here on Thursday. He said that SML has refunded Rs 6 billion to federal government.
Balochistan government official said that former Prime Minister Nawaz Sharif during a visit to Sandak had announced to own the liability. He said that federal government had not given loan and it was just investment but now it had declared it a loan after decision to transfer SML to Balochistan under AHB.
The presentation reveals that during trial production in 1995, project produced 1500 tones of blister copper and successfully marketed it in international market but the project could not be made operational due to non-availability of trained manpower and working capital. The project remained stalled till 2001. Government of Pakistan had been incurring expenditure of Rs 300 million annually on payment of salary of staff and maintenance of machinery and other facilities.
SML did endeavour to arranger funds and manpower to make the project operational but efforts could not materialise. In 1999, government decided to make the project operational and a committee of Federal Cabinet was constituted to recommend options. The committee recommended leasing option to re-start the project.
The Cabinet in its meeting held February 2000 approved recommendations of the Cabinet Committee and constituted a Leasing Committee. The Committee was headed by the Minister of Petroleum and Natural Resources having representation of the Ministries of Finance, Commerce and Government of Balochistan.
Adhering to the international practices and fulfilling formalities, the Committee recommended leasing of project to MCC China. The Cabinet approved the recommendation of Leasing Committee in 2001. Lease contract was signed with M/s MCC on November 30, 2001.Government of Pakistan gave EPZ status to the project.