ISLAMABAD - Land Mark Resources (LMKR) Pakistan (Private) Limited hired by Petroleum Ministry to manage and sale geophysical and geological (G&G) data to companies involved in Exploration and Production (E & P) sector of the country in a letter asked to publish an unqualified apology and to correct the statements made in the report published on December 22 with a headline ‘Petroleum Ministry overlooks LMKR’s Rs 500m purchases against rules’. However, the reporter stands by its story and asked for a commercial audit of the company’s accounts by the Accountant General Pakistan Revenues (AGPR) to make the fact clearer for every citizen of homeland.

Terming the news report as misrepresentation, misleading and mala fide, the LMKR through its legal counsel has said that company in any way violating its contract, rules and regulations or indulging in any “overspending” is patiently false. Hence, the question of violation of rules and procedures and overspending does not arise, as LMKR is itself a stakeholder in the profits of the project. In so far as purchasing is concerned, LMKR being a private company is not governed or bound by the PPRA Rules and payments to the government are also being made in accordance with PPEPDR Contract. The LMKR has further said that as the project is public-private partnership with shared profits, the allegation that LMKR has earned hefty amounts is not only baseless but also preposterous. Independent audit of the accounts of the PPEPDR project has been diligently carried out every year in strict compliance with the terms of the PPEPDR Contract. The PPEPDR Contract having been renewed, the transfer of data, which is not the transfer of a single CD but the entire set up of the data centre, has been deferred accordingly. There is absolutely no default by LMKR on its training and other obligations under Contract.

The LMKR legal notice further says, “The report has been written without verification of facts and understanding the commercial nature of the transaction. The publication of the report without proper homework and verification clearly shows that the same has been inspired with the mala fide intent of harming LMKR’s reputation and damaging the Project. Imputation of violation of the PPEPDR Contract by LMKR and lack of action by DG PC is a crude attempt at insinuating malpractice when in fact there is absolutely no issue with LMKR’s performance or any complaint by DG PC.”

The Reporter adds: the news story was based on available copy of the PPEPDR Contract and official correspondence with this scribe that can be produced on any forum for further investigation or necessary action if it (LMKR) requires so.

LMKR in its clarification has just criticised the story in a generalised fashion but not the facts, which are based on a copy of Contract and on official correspondence done between the company and petroleum ministry’s officials also available with this scribe. Ironically, the company has not said a single word about thirteen long years extension of the project altogether contrary to the agreement.

“The Contract shall be effective as of the effective date and shall remain valid for a period of five years. The Contract is renewable for two terms of one year each, with mutual consent of the parties on the same terms and conditions,” a copy of the Contract reads.

Whereas indulging in any “overspending” by the company is concerned, it merits mentioning here that over spending is evident through a January 11, 2012 letter of Managing Director AFPAK Yusuf Hussain with a subject: PPEPDR Project-Excess of actual expenditure over LMKR’s share of income asked DG PC of Ministry of Petroleum & Natural Resources Mr Sher Muahmmad Khan that the OPEX (Operating Expenditure) may be revisited.

“The project Operating Expenditure (OPEX) budget for the period beginning Sep.2010 and ending Sep 2011 was allocated as Pak Rupees fifty million five hundred and eighteen thousand eight hundred and ninety nine (Rs 50,518,899/-). However, the actual expenditure incurred during the same period stood at Pak Rupees sixty four million five hundred and sixty four million five hundred and forty six thousand two hundred and six (Rs 64,546,206/- only) which comprises a twenty eight percent (28pc) increase over the allocated budget,” the letter says.

Regarding allegation of earning hefty amounts through mark up and by depositing government share to the government treasury on yearly basis instead of agreed quarterly basis mode of payments and extending loss of million of rupees deliberately to the government treasury by the LMKR, the company again in a generalised fashion said ‘payments are being made in accordance with PPEPDR Contract’ and the allegation that LMKR has earned heft amounts is not baseless but also preposterous.

However, it is a matter of the fact that clause 7.1.3 clause of Article VII-Compensation, Invoicing and Payment of the Contract says ‘The Contractor shall make quarterly payments to GoP (Government of Pakistan)’.

The LMKR in its clarification item further said the PPEPDR Contract having been renewed; the transfer of data, which is not the transfer of a single CD, but the entire set up of the data centre has been deferred accordingly. It is a crystal clear fact in accordance with the sources that the company has never ever handed over the data to the petroleum ministry, only a nominal handing taking done by the company and oil ministry’s officials only to save skins so no any other company ever strived hard to participate in the bidding process owing to above said fact. Even if someone ever opted it surprisingly left the bid for LMKR viewing the gross root level facts, sources added.

Moreover, vehicle list of old PPEPDR Contract tells that DG PC has the ownership of a Mercedes van with a registration No. IDK-9861 is off-road-not in working condition and IDK-1347 a Nissan Sunny vehicle is on-road. Similarly, list of vehicles purchased under 2009-2014 PPEPDR Contract discloses that Toyota Hiace with a registration No. QA-941 is on-road for PPEPDR Project work and is in the LMKR ownership, Toyota Hiace registration No. QA-942 is on road for PPEPDR Project work and is also in the LMKR ownership.

The reporter of the story further asked why no commercial audit made so far and why the Director General Petroleum Concession (DG PC) is solely relying on LMKR’s recommended few auditors and not bothered to get the audits of the accounts done even by the Accountant General Pakistan Revenues (AGPR). The need is to conduct commercial audit of the accounts of the company and the Contract (PPEPDR) to make the facts more clear.