ISLAMABAD: The federal cabinet on Thursday ordered renegotiation of ‘non-transparent’ contracts of the previous government with LNG terminal operators, beginning of sugarcane crushing latest by Nov 15 and closure of the Earthquake Reconstruction and Rehabilitation Authority (Erra).
A meeting of the cabinet, presided over by Prime Minister Imran Khan, also constituted a ‘high-powered committee’, to be led by the Sindh governor, for development works in Karachi and asked for expediting the process of finalising the National Finance Commission (NFC) award to allocate three per cent of divisible pool resources for development and mainstreaming of the tribal region.
Speaking at a news conference after the meeting, Petroleum Minister Ghulam Sarwar Khan said the previous government signed three LNG agreements — a gas supply deal with Qatar and two LNG re-gasification terminals with two local business groups.
He said the agreement with Qatar had been under investigation by the National Accountability Bureau and other institutions. The petroleum division has also submitted its findings and the audit report to the Supreme Court.
“Pakistan economy is under tremendous stress because of these two contracts (of LNG terminals) that were signed in frustration, haphazard manner and with malevolence,” he said.
The minister said the cabinet had decided to renegotiate contracts with terminal operators as a first step, adding that the contracts carried clauses that allowed “revisit with mutual consent”, otherwise the government would trigger other options.
“If they have to live and do business in Pakistan, they would have to revisit the contracts or the government would take other measures,” he said.
When asked about the other measures, he said that “we are talking about resolving the matter on the table first”, otherwise relevant institutions were looking into the matter deeply and it might lead to filing of corruption references if re-negotiations were not fruitful.
Ghulam Sarwar said the two LNG terminal contracts were given to two business groups — Engro and Pakistan Gas Port — at “exorbitant rates of unprecedented levels and showed there were some underhand deals”.
He did not agree that such steps would put off investors, saying it was a myth created by the vested interest, but the fact was that transparency in contracts and businesses encouraged investors to come forward.
Information Minister Fawad Chaudhry said the government had allowed sugar export a couple of weeks ago to reduce two million tonnes of surplus stocks so that sugar millers could make timely payments to farmers, but strangely the Pakistan Sugar Mills Association and some other influential people were talking about delaying sugarcane crushing until Nov 30.
“This is unfair to the farmer and unacceptable to the PTI government,” he said, adding that the cabinet had decided to stand by the farmers and not let them suffer at the hands of millers. He said the government was well aware who was behind sugar mills in Sindh and what was the situation in Punjab.
“The sugarcane crushing will start by November 15 at all cost and there will be no compromise,” he said, adding that the prime minister had given unequivocal orders to the provincial governments to enforce the Nov 15 deadline by utilising entire machinery.
Mr Chaudhry said the cabinet had decided to withdraw an appeal filed by the previous government against a ban on prohibited and automatic arms licences in the Supreme Court and directed the interior ministry to formulate in consultation with the provinces a new arms licence policy keeping in view local custom and traditions.
He said the PML-N government had banned prohibited and automatic arms and cancelled their licences which were challenged and overturned by high courts because the subject fell in the provincial jurisdiction in the aftermath of 18th Constitution Amendment. The federal government had challenged this in the Supreme Court.
The minister said the PTI government also believed that it was a provincial subject and all the provinces, particularly Khyber Pakhtunkhwa and Balochistan, also had their local custom which could not be undone at the federal level. The provincial governments were better placed to deal with the subject, he added.
The information minister said the cabinet had constituted a high-powered committee for transformation of Karachi and revamping of the Karachi Development Company against whom a lot of complaints were flowing in on account of misuse of provincial and federal funds.
The committee headed by the Sindh governor and comprising Karachi-based members of the National Assembly and other notables would work out how effectively federal funds could be utilised for development of Karachi and solution of people’s problems, he said, adding that the provincial government would also be taken on board.
The minister said the cabinet directed Finance Minister Asad Umar to expedite the process of finalising the NFC award so that three per cent funds from shares of the four provinces could be diverted for development of tribal areas and their merger with KP. The meeting reviewed the progress on Fata mainstreaming and was told that the Fata secretariat would come under the KP chief minister and the Peshawar High Court had finalised the judicial mechanism.
Mr Chaudhry said Erra was established after the 2005 earthquake to respond to recovery, reconstruction and rehabilitation of devastated areas and it had mostly completed its task by now. Therefore, he added, the cabinet had decided to abolish the body and merge it with the National Disaster Management Authority. The existing NDMA chairman would be responsible for merger and remain its head as well in the intervening period.
He said that of the 950 staff of Erra, those belonging to Azad Kashmir and KP would return to their respective governments while the federal employees would be absorbed in the NDMA and none would be laid off.
The minister said the cabinet had decided to reduce obligatory foreign visits of the federal government by 33.3pc to 428 from 642. Apart from the foreign affairs, no minister would visit abroad more than thrice a year and in case of urgency would require approval from the prime minister.
Commenting on the Imran Khan’s latest statement that Pakistan may not need an IMF programme, Mr Chaudhry said the prime minister and the finance minister had always been talking about the financing gap of $12 billion and simultaneous negotiations with friendly countries and the IMF. He said the gap could be bridged with the combination of two sides and the prime minister was not saying something new.
Published in Dawn, October 19th, 2018