LNG supply through spot procurement: PPRA Board seeks exemption from Rules 13 and 35

ISLAMABAD: The Public Procurement Regulatory Authority (PPRA) Board has recommended to the federal government for grant of exemption from applicability of Rules 13 and 35 of the Public Procurement Rules, 2004 for the procurement of LNG through spot procurement till December 31, 2022 to the extent of defining reasonable response time and duration of bid validity after announcement of evaluation report subject to the condition that fair opportunity shall be provided to the potential bidders and to ensure redressal of grievance, official sources told Business Recorder.

On April 30, 2022, Managing Director PPRA informed the Board that Ministry of Petroleum & Natural Resources requested the Authority to allow exemption to Pakistan LNG (PLL) for minimum time period required under PPRA Rules 13(1) and 35 for procurement of approximately 37 spot cargoes from July, 2022 to June, 2023.

He further revealed that PPRA has already granted approval from applicability of the Rules 13 & 35 of the Public Procurement Rules, 2004 to PLL for procurement of LNG through spot procurement of twenty-seven cargoes of LNG for PLL till June 30, 2022. However, the Ministry has again requested the Authority regarding exemption from applicability of rules 13(1) and 35 of Public Procurement Rules, 2004 for procurement of 37 cargoes till June 30, 2023.

The Managing Director invited Secretary Petroleum Division to further deliberate the case. Secretary, Petroleum Division maintained that the Board had already recommended two exemptions to PLL for spot procurement of 27 cargoes till June 2022.

He explained that PLL is engaged in procurement cycle for spot cargoes to be delivered from July onwards, and spot tenders are required to be conducted immediately, while existing exemption is till June 2022.

He maintained due to extreme volatility in spot LNG market PLL is facing challenges to procure LNG from the spot market given applicability of PPRA rules especially Rules 13 (1) and 35 of public procurement Rules, 2004. In this regard, PPL may be granted immediate relaxation/exemption from applicability of Rules 13(1) and 35 of Rules for procurement of spot cargoes from July, 2022 to June 2023 for approx. 37 spot cargoes.

One of the Board Members pointed out that earlier the Board had required PPRA management to finalize the mechanism for import of commodities through spot procurement in order to avoid the difficulties being faced by the procuring agencies e.g. PLL. PPRA Management stated that the comments received from the stakeholders on the mechanism will be finalized shortly and will be presented in the forthcoming Board meeting.

The Board directed the PPRA Management to finalize the import mechanism at the earliest and place before the PPRA Board in the forthcoming meeting to be held on May 15, 2022.

After thorough deliberations, the Board recommended to the Federal Government under Section-2l of the PPRA Ordinance, 2002, for grant of exemption from applicability of Rules 13 and 35 of the Public Procurement Rules, 2004 for the procurement of LNG through spot procurement till December 31, 2022 to the extent of defining reasonable response time and duration of bid validity after announcement of evaluation report subject to the condition that fair opportunity shall be provided to the potential bidders and to ensure redressal of grievance, if any. The Board also directed the PPRA Management to finalize the import mechanism rules for import of commodities through spot procurement at the earliest and place the same in the forthcoming meeting of PPRA Board to be held on May 15, 2022 for consideration.

Copyright Business Recorder, 2022