LAHORE - Port Qasim Authority (PQA) is deliberately trying to cause default in its contractual obligation to provide four LNG Tugs to handle LNG Vessels, as provided in Article 3.14 of the LNG Terminal Implementation Agreement executed with Engro Elengy Terminal Pakistan Limited (EETPL) on 22-6-2014. Revealed Transparency International Pakistan in a letter to Federal Secretary, Minister of Ports & Shipping, Government of Pakistan on Friday.

TIP said that it was violation of PPRA Ordinance and Public Procurement Rules 2014 in inviting tender of four tugs of 75 tons -85 tons bollard pull, and investment and attempts to delay the procurement.

As per agreement PQA is responsible to make available a minimum of four (4) tugs suitable for safely handling LNGCs within Port Qasim. PQA started the procurement process of the 4 LNG tugs, worth $60 million to $80 million, in July 2014, but debarred Chinese Tug Manufacturers to bid. TI Pakistan sent a letter highlighting following objection to PQA on 19th July, 2014.

But PQA did not respond to TIP letter dated July 19, 2014, and the Ministry also failed to take corrective measures, though many reminders were also sent.

These tugs if not supplied to M/s EETPL in March 2015, (when the Terminal Operation commences as per SSGCL Operation and Service Agreement dated 29-4-2014) a penalty of about  $11-13 million per month will be paid to M/s EETPL by Pakistan Government for which PSO has given M/s EETPL a sovereign guarantee.

It is reported that PQA and the Ministry are trying to create a situation of urgency, so that PQA can hire from a predetermined supplier, the 4 tugs at higher rental cost reported to be $10-13 million per years, under PPRA Rule 42, Alternative methods of procurements, Sub Rule (iii), for reasons of extreme urgency brought about by events unforeseeable by the procuring agency, the time limits laid down for open and limited bidding methods cannot be met.

And if PQA fails to provide the tugs to EETPL in March 2015, PQA will be responsible to cause loss to exchequer, as it will amounts to default of Government of Pakistan, and EETPL will be paid $270,000 per day ($98.55 million per year) as capacity charges.

The Secretary is requested to examine the complaint, and direct PQA to immediately invite two separate tenders, one for hire of 4 tugs for 1 year, and another tender for Supply of 4 tugs in 12 months, on Single Stage one Envelop Procedure, and allow China and manufacturers of all other countries, as only 5 months are available with PQA to provide the 4 LNG tugs for EETPL LNG Vessels handling.