The apex court ruled that it did not want to hear cases of a political nature and defined the petition filed by Sheikh Rashid through his counsel Sardar Latif Khosa challenging the Liquefied Natural Gas (LNG) agreement signed between Qatargas and Pakistan State Oil in February 2016 as of a political nature. The court observed that National Accountability Bureau (NAB) is now an independent institution and able to undertake the necessary investigation to determine whether the substance of the LNG deal preempted any concerns about the possibility of corruption and whether the LNG agreement followed due process.
Pakistan has a history of an administration making billions of dollars of government-to-government deals that are subsequently successfully challenged in our court of law - a challenge that, in turn, accounts for the perception internationally that any agreement signed with an incumbent Pakistani administration may be overturned in country's courts which is one of the main reasons behind the country's sustained failure to attract the much needed foreign direct investment.
The World Bank's International Centre for Settlement of Investment Disputes (ICSID) had ruled that it was unlawful denial of a mining lease to Tethiyan (with 75 percent of the exploration licence encompassing the Reko Diq deposits) by the government of Balochistan holding the remaining 25 percent interest. The actual damages to the company have not yet been determined by the ICSID, however, the company has maintained a loss of investment of 400 million dollars. Reko Diq with the largest copper reserves in the world estimated at 5.9 billion tonnes with an average grade of 0.41 percent and gold reserves amounting to 41.5 million oz with an average grade of 0.22 g/tonne remains un-mined and the country is unable to take economic advantage of these large natural deposits.
ICSID also ruled in favour of Karkey (a Turkish company that set up a ship to provide rental power services) and imposed a fine of around 800 million dollars on Pakistan, including a 5.6 million dollar interest per month. And our apex court overturned the government's decision to privatise Pakistan Steel Mills during the Musharraf era which remains a heavy burden on the national exchequer to this day. These cases no doubt prompted the Attorney General of Pakistan Ashtar Ausaf Ali to publicly express concerns over the Supreme Court judgments: "Some of the judgments by our courts led to international proceedings that in turn awarded billions of dollars in damages to investors, and billions more are pending in claims against the state."
There are some concerns about the LNG deal, including that it encompasses (i) a price (13.37 percent of Brent as announced by the then Minister for Petroleum and Natural Resources and the incumbent Prime Minister Shahid Khaqan Abbasi though the actual price is blocked on the agreement uploaded on the PSO website) higher than the one agreed with Guvnor the same month though it was for five years and not 15 years; and (ii) it was a buyer's market in 2016 with many countries, including India, reducing the contractual price before the expiry of the contract period to a rate lower than what was agreed with Pakistan the same year.
To conclude, Business Recorder fully supports the court's decision with respect to the LNG case. NAB is the right forum to undertake an investigation and if the LNG agreement is found to have violated due process or its substance found to be not in the interests of the country then appropriate action should be taken.
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