THIS refers to the news item, ‘NAB urges PQA not to sign islands deal with Bahria Town’ (March 17). The National Accountability Bureau has suggested to the Port Qasim Authority not to enter into a concession agreement with the Bahria Town Company for development of Bundal and Buddo islands since Bahria Town has not provided a ‘performance bank guarantee’ of Rs40 billion to the PQA, at the issue of PQA’s letter of intent (LoI) as per tender conditions.
It is said that this guarantee of Rs40 billion is one per cent of the islands’ development cost, which means that the total development cost of the islands’ project will be Rs4,000 billion. This guarantee has to be valid till one year after completion of the project.
The concession agreement is a negotiated contract between Bahria Town and the Port Qasim Authority that gives Bahria Town the right to do a specific business within the PQA’s area. For this, Bahria Town has to pay the PQA the ongoing fees that may either be a fixed amount or a percentage of the revenues earned by Bahria Town.
In the PQA area there are at present many concessionaires who are doing business such Fauji Company, owning the Fauji Oil Terminal, another company owning the container terminal, several shipping companies, companies in the industrial zone of the PQA etc.
The Port Qasim Authority has vast experience of concession business and concession agreements. There is no need for the NAB and others to advise the PQA on these matters as it has experience and expertise.
A. RAHIM Karachi