Gas for Fatima Fertiliser: industries ministry to submit fresh summary to ECC

The Ministry of Industries and Production is to submit fresh summary to the Economic Coordination Committee (ECC) of the Cabinet, proposing allocation of gas, time schedule and monitoring system for Fatima Fertiliser Company Limited (FFCL) on line of Qadirpur Gas Field Formula (QGFF), official sources told Business Recorder.
They said that Prime Minister Shaukat Aziz had directed the Ministry in the ECC meeting on December 27 to come up with a new summary, and adding that the Ministry had completed the task assigned to it.
The Ministry, which is under fire for leaking what the sources said some classified information, had also been asked to monitor the implementation plan.
The Ministry had informed the ECC in its meeting held on August 16 last year that it had allowed extension in completion date of the project, as requested by FFCL, up to March 2008 for Phase-1, and the remaining by August 2008, subject to its achieving financial close within 90 days and provision of an irrevocable bank guarantee from ''A'' rated bank within 30 days to ensure financial close in the stipulated period.
The Ministry had also said that National Bank of Pakistan (NBP), as the agent bank, had confirmed the financial close by FFCL, as defined by ECC.
The financial instruments provided by the agent bank were examined in detail by the Secretaries'' committee, comprising Secretaries of Finance, Water and Power, Petroleum and Industries, which concluded that financial close had been achieved.
The Secretaries'' committee had pointed out discrepancy in the Common Terms Agreement (CTA), signed between FFCL and financial institutions, as the implementation plan provided by the company showed that the project would be completed in August 2008 while the commercial operation date had been set as May 2010.
Sources said that the Secretaries'' committee had recommended that to ensure that the project was completed within the time specified by the ECC, sufficient performance guarantees be obtained from FFCL, or a penalty clause be imposed, if the project is completed after August 2008.
The ECC was also informed that the bank guarantee had expired on December 20, 2006. Sources said that the ECC criticised the committee for recommending penalty, which it had not been authorised.
"The committee had, in fact, gone beyond its mandate in recommending penal clauses for variation in project completion date given in CTA and financial close," the ECC said, according to sources.
Sources said that the Industries Ministry''s fresh summary would be considered by the ECC in its next meeting.