The Ministry of Industries and Production is reportedly once again under pressure to allocate an additional 35 mmcfd gas to the much-delayed Fatima fertiliser plant, a joint venture of Fatima Group and Arif Habib Group, sources close to the Minister for Industries told Business Recorder here on Friday.
However, the two key stakeholders, ie Ministries of Petroleum and Water and Power, are resisting the move. "How can the Industries Ministry say no to a proposal when the real decision-makers are pursing it vigorously," the sources stated.
The sources said the Industries Ministry had prepared a summary for consideration of the Economic Co-ordination Committee (ECC) of the Cabinet for allocation of 35 mmcfd gas to the fertiliser plant in addition to 75 mmcfd gas allocated in 2004.
The Industries Ministry, which had been criticised in the previous government for extraordinarily favouring the project, convened a meeting of the stakeholders twice, but they failed to attend. The last meeting was convened on Thursday (January 29) at 2 pm, but it was postponed as the stakeholders refused to participate, the sources said.
The sources said the government had already given extension in the deadline thrice to the project. The ECC in its meeting on August 24, 2004 approved allocation of 75 mmcfd gas to Fatima Fertiliser Company Limited from Mari gas field, subject to the condition that the unit would come into production within two years of approval.
The company had indicated in its communication to the ministry that the first phase would be completed by March 2008, while the remaining portion would be completed by August, 2008 which, according to sources, had not been completed. Keeping in view the hardships, faced by the company, the government further extended the deadline to the middle of 2009, which again might not be achieved, the sources further added.
In 2006, main reasons for the delay given by the firm were delay in signing of gas sale and purchase agreement (GSPA) with the Mari Gas Company Limited on July 12, 2005 (11 months after the decision of the ECC); 24 months' period set by the Ecnec for commissioning of the project was inadequate as Pak-Saudi Fertiliser Limited had taken up to 49 months for completion; and world class engineering companies were reportedly fully employed at the time in setting up projects in oil, gas and chemical sectors and were refusing new enquiries.
The ministry proposed that the allocation of 75 MMCFD of feed gas from Mari gas field be revoked; the gas be auctioned through a transparent, competitive process; 13 intending bidders pre-qualified for Qadirpur gas may be treated as pre-qualified for Mari gas and be allowed to participate in the bidding process. This proposal was not approved by the ECC as the Agriculture Ministry opposed it.
However, the firm had provided required bank guarantee of Rs 400 million on the same pattern as were being given by the IPPs. Earlier, the influence of Prime Minister Secretariat had been used for gas allocation to a 200 MW Fatima power plant.
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