ISLAMABAD: Ministry of Privatisation has reportedly raised objections on Power Division’s summary on constitution of Negotiation Committee for negotiation of Government to Government (G2G) commercial agreements along with price discovery mechanisms, sources close to caretaker Minister for Privatisation told Business Recorder.

The agenda for the Cabinet Committee on Inter-Governmental Commercial Transactions (CCIGCT), along with the summary submitted by Power Division, was placed before the Chairman, CCIGCT/ caretaker Minister for Privatisation who held that the process, provided in the Inter-Governmental Com-mercial Transactions Act, 2022 has not been followed while submitting the summary to the Cabinet Committee. The summary lacks clarity of understanding of the applicable Act.

According to Privatisation Division, Section 3 of the Act provides that a G2G agreement shall, in the first place, be negotiated and executed prior to a commercial agreement under the G2G agreement.

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The proposal is seeking approval of a negotiation committee to negotiate and finalise G2G Framework Agreement, as well as, Commercial Agreement which is not only against the spirit of the Act but is violative of Section 4 (2) (b) of the Act. Thus, the proposals of the summary are not in line with the statutory scheme provided in the Act.

Similarly, Para 7 (ii) seeking authorisation of fast track procurement of services of Transaction Advisers or consultants for finalisation of Commercial Agreement is also not in line with the Act as a G2G Agreement has to be executed in the first place and a commercial agreement, under the G2G agreement, can be negotiated and executed thereafter. Thus, proposal is also not in order.

Privation Division further stated that MoU, being a G2G agreement as per Section 2 (e) of the Act, has not been annexed with the summary to evaluate as to whether the same includes broad parameters and mechanism for execution of intended commercial transaction as required under Section 3 (2) of the Act and whether the said MoU was signed prior to the promulgation of this legislation to qualify for being a G2G agreement under this Act.

“The question of authorisation of fast track procurement of services of transaction advisers or consultants is premature since there is no G2G agreement in place yet,” the sources quoted Privatisation Division as saying.

PD further stated that Negotiation Committee can be constituted for a G2G agreement or a commercial agreement, as mentioned at Section 4(2) (b) of the Act.

Similarly, under the same provision the price discovery mechanism has to be approved by the Cabinet Committee while Power Division is seeking authorisation of Negotiation Committee for approval of price discovery mechanism and also by the Consultants/ Transaction Advisers. This needs to be clarified and brought in line with the provisions of the Act.

In view of the above, Privatisation Division has proposed that Cabinet Division returns the summary to Power Division to re-submit after complying with the provisions of the Act and taking into account its observations. Power Division may also be requested to seek views and comments of Law and Justice Division, on the summary, before its submission to CCIGCT.

The sources said Cabinet Division has asked Power Division to re-submit the summary after doing the needful in the light of Privatisation Division’s observation.

Copyright Business Recorder, 2024