LAHORE, Oct 5: The Pakistan State Oil (PSO) has never defaulted on its rent payment for railways land and the latest amount of Rs37 million was paid on June 29, 2005, a PSO spokesman said on Wednesday.

In response to a Dawn story published on Oct 5, 2005, the spokesman said that facts were absolutely to the contrary. The PSO had made the payment through cheque No. 391360 sent to the Divisional Accounts Officer, Pakistan Railways, Karachi, which was received on behalf of the Divisional Superintendent, Pakistan Railways.

Giving background of the issue, the spokesman said during the 1980s PSO was entrusted with the responsibility of developing infrastructure throughout the country for the storage of petroleum products to ensure prompt and regular supply to customers.

The Pakistan Railways, being government-owned enterprise, was given priority for carriage of POL products. The PSO negotiated with the Pakistan Railways for renting out their vacant lands along rail tracks in different cities for developing storages of petroleum products. Thus the PSO facilitated the Pakistan Railway with carriage income as well as in the shape of land rentals, thereby contributing to enhance the revenue of a national organization.

The PSO has been paying regular rent on mutually agreed rates. However, during this period the railways first increased the rental by 100 per cent every three years, and then in 2002 abruptly increased the rates to 5 per cent of the DC value of land.

The matter was taken up in the Oil Companies Advisory Committee (OCAC) by all the OMCs and then at the Ministry of Petroleum and Natural Resources level, where it was mutually agreed on June 24, 2005, that the PSO would pay to the Pakistan Railways rent of lands leased at 3.75 per cent of the DC value.

After necessary calculations and adjustments, the PSO paid Rs37 million to the Pakistan Railway on account of rentals of June 29, 2005.