ISLAMABAD - AHMAD AHMADANI - Making sheer mockery and utter violation of prescribed rules, mighty baboos at Pakistan State Oil (PSO) have allegedly done mega corruption in a ‘controversial’ locally blended fuel oil procurement agreement which was signed in May 2012.

The Board Audit Committee (BAC) of PSO has unearthed this tale of notorious corruption in a locally blended fuel oil procurement agreement of the state-owned oil giant with M/s Bakri Trading Company Pakistan Limited (BTCPL).

Exclusively acquired documents of Board Audit Committee (BAC) of PSO showed that this contract, signed by the top baboo at the PSO in May 2012, was for five years. This agreement was made without any tenders and was not presented even in the PSO Board of Management.

Under the functions of the Board approved in 1974 and under the Code of Corporate Governance (CCG), it is BoM’s responsibility to provide strategic guidelines, and overview company’s policies and practices to ensure that transparency is maintained and best corporate principles are upheld. Again, under CCG, BoM has to overview company’s decision to enter joint ventures, agreements, and procurement of services and supplies.

Showing serious concerns over alleged corruption in a fuel procurement deal of the state-owned oil giant with M/S Barki Trading Company Pakistan Limited, the BAC document has so far unearthed that the sale purchase agreement, inked for a period of five years with estimated annual quantity of 1.40 million metric tons (MT) of blended oil, was made without tenders.

This agreement was signed while exercising the powers of MD PSO as the management ostensibly assumed that top gun was authorized to sign this agreement. Without inviting any interested parties for this supply tender, the PSO management violated PPRA rules, official documents further confided.

Sources informed that the Board Audit Committee (BAC) of PSO decided to form a fact finding committee that would present findings to the BAC within 3 weeks and the final findings would be shared with PSO BoM for its consideration. But the chairman Board of Management and the MD PSO had resisted formation of any fact finding committee.

However, a committee comprising of Dr Abid Suleri, Hamayoon Jogezai and Nasim Lawbar was formed, sources added.

As per agreement, PSO would procure 14 lakh tons of furnace oil from M/s BTCPL for five years and after completion of the said span of time the agreement would be extended with mutual consent.

However, in case of war, emergency and bad law and order like situation the company would not be bounded to provide fuel oil, adding that in case of emergence of any dispute, the legal remedy would be sought only at Karachi.

Furthermore, PSO and M/s BTCPL would jointly check oil quantity and quality and in case of if PSO refuses to procure oil then it (PSO) will have to pay the price of oil along with losses.

The BAC has also recommended that the 5 billion dollars contract of PSO with M/s BTCPL to buy blended oil needs to be analyzed and justification of PSO management that M/s BTCPL is the only player in the oil blending business in Pakistan so PPRA rules do not apply to this deal is wrong. Again, the status of M/s BTCPL, as sole blender of oil, needs to be meticulously checked and confirmed. The BAC further recommended that in future any such agreement should be shared with BoM before finalization.

It is pertinent to mention here that the BAC document also mentions Dr Abid Suleri Chairman of BAC saying that there are many other players in blending business and therefore legally this agreement of PSO comes under clause 50 of S.R.O 432 (1)/2004 PPRA Ordinance, 2002 (XXII of 2002). To finalize this deal, a competitive edge was given to M/s BTCPL by declaring it the only oil blending company in Pakistan.