Ministry of Industries and Production (MoI&P) is reportedly concerned that any deal for the revival of M/s Tuwairqi Steel Mills Limited (TSML) with Ciena Group of USA can be a potential case of NAB, well-informed sources told Business Recorder.
Representatives of TSML and Ciena Group have held meetings with the Prime Minister's Advisor on Commerce, Textile, Industries and Production and Investment, Abdul Razak Dawood and at the Ministry's level and discussed different ways to revive the project.
M/s Al-Tuwairqi Steel Mills Limited (TSML), a project of Foreign Direct Investment (FDI) by Al-Tuwairqi Group of Companies of Saudi Arabia, was established at Bin Qasim, Karachi, over an area of 220 acres. A term sheet as reported by TSML representative was signed with Ceina Group, USA on October 15, 2019 under the chairmanship of Razzak Dawood.
Secretary Ministry of Industries and Production alluded to the statement in the letter received from Ciena Group USA on October 8, 2019 regarding recommendations reportedly made by the Ministry of Industries and Production and other Ministries. It was clarified that hitherto Ministry of Industries and Production has not made any firm recommendations. However, consultation process to explore possibilities acceptable to all contracting parties is still underway.
In the letter of October 8, 2019, certain proposals were made by Ciena Group and presented through TSML. During the meeting it was decided that the proposals may entail legal implications. The litigation between Government of Pakistan and TSML is still in progress in Permanent Court of Arbitration (PCA), and Ministry of Industries and Production will not be in a position to offer any comments till it gets an advice from its legal team.
Recently, the Economic Coordination Committee (ECC) of the Cabinet approved a technical supplementary grant of Rs 420 million to pay court fee and fee to foreign counsel in case of Dr Hilal Hussain Al-Tuwairqi and Al-Ittfaq Steel Products Company Limited.
A Memorandum of Understanding (MoU) was signed with the Government of Pakistan on May 26, 2004 for supplying natural gas to the company. As regards the tariff, gas was to be supplied to the project company on the same industrial rates as applicable for other such industries subject to revision from time to time. The tariff proposal contained in MoU was excluded in Implementation Agreement (IA) signed on June 8, 2007 between the GoP and M/s TSML due to observations from Finance Division and the Ministry of Petroleum and Natural Resources.
Proceedings have been initiated against Pakistan in the Permanent Court of Arbitration (PCA) London invoking article 17(2) of the agreement for promotion, protection and guarantee of investments among member States of the Organisation of the Islamic Conference, 1981 by M/s TSML for redressal of their grievances.
The incumbent government and M/s Tuwairqi Steel Mills Limited (TSML) have discussed the revival plan of the entity with a fresh injection of $ 700 million. M/s TSML is seeking relaxation in duty on billets and subsidy on gas after three years of operating the mills.
Copyright Business Recorder, 2019
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