A parliamentary panel has sought in-camera briefing on international agreements on Reko Diq and Saindak Copper Gold projects from the federal and Balochistan governments. The committee was informed about the present position of exploration of gold and coal at Reko Diq as well as the status of cases in the international courts. The committee met here in the chair of Mohsin Aziz on Monday.
Director General Mining Petroleum Division Mohammad Iqbal informed the committee that Reko Diq project was taken by the consortium to the ICC International Court of Arbitration and International Centre for Settlement of Investment Disputes (ICSID). The provincial government of Balochistan and attorney general of Pakistan are following the case. Member Committee Mir Kabir Ahmed Muhammad Shahi argued that responsibility must be fixed on the person who prepared the agreement on Reko Diq without proper homework. He said earlier the consortium agreed for out of court settlement against Rs 5-6 billion, the money, according to the consortium, spent on Reko Diq. However, provincial government of Balochistan declined to pay and now the investor is claiming $12 billion as compensation.
The committee was further informed regarding the Saindak Copper Gold project. The committee was informed that Rs 29 billion were invested on Saindak project from 1974 to 2006. Two five-year extensions were given on the project under a provision in the agreement. The profit shared with Balochistan government came down from $50 million in 2011 to $6.1 million in 2017 because of reduction in production of copper and reduced rate of metal in international market.
The DG Mining maintained that next time the Saindak Project would be offered through tendering for a longer period. Member committee Saleem Zia asked if the provincial government offered to take over the project. Another member Mir Kabir Ahmed said that Aghaz-e-Haqooq-e-Balochistan Package promised to hand over Saindak Metal Limited to the province. He further alleged that the project was not handed over to the province despite the provincial assembly of Balochistan passed a resolution.
Kabir Ahmed further alleged that share in profit in Saindak was reduced from 5 percent to 2 percent in 2010 while Rs 5 billion were wasted in the project by Dr Samar Mubarik and Dr Qadeer Khan. The DG Mining said the extension was given twice in consultation with provincial government of Balochistan which argued it was economically viable to run the project.
The committee constituted a subcommittee which would visit the area and submit recommendations. The Petroleum Division officials briefed the body that all activities at the copper field were well-documented and verified by different government agencies including Customs, Export Promotion Zone Authority (EPZA), Federal Board of Revenue and Directorate General of Mines and Minerals, Balochistan.
They said the commodities entering or taken away from the project area were documented by both the EPZA and Customs authorities at the project site. The product export from Saindak to Karachi is treated as "bounded consignment." The officials said the chief instructor of Mines Balochistan regularly monitored the mining operations to ensure safety and health of workers, besides technical experts and mining engineers were deployed to monitor the operational activities.
"Mining and extraction of products for sale are weighed and sampled at the laboratories there," they said, adding the accounts of the contractor were audited by a reputed Pakistani chartered accountant firm appointed in consultation with Saindak Metals Limited (SML). Additional Secretary Mian Asad Hayaud Din said the Petroleum Division was going to brief the Prime Minister on security issues in some oil and gas exploration blocks, suggesting forming a Special Security Force as E&P companies were spending around Rs 14 billion annually on security of their crew and machinery.
The meeting was also informed by representatives of Mari Petroleum Company Limited that it was going to start seismic surveys in Zarghon and Block-28 from March and April respectively, adding the survey took one-year time to complete as per international practice. The committee called for monitoring the report submitted by subcommittee on petroleum to examine the recruitment of locals and social welfare schemes under the CSR obligations by the oil and gas companies in KPK. The committee stressed the need for tools for strict monitoring of the Saindak Copper Gold and Coal at Reko Diq.
A report was presented by the sub-committee. The committee directed that composition of the district committee for CSR projects should be reviewed and the new composition may include one member each from National Assembly and Senate, district nazim, concerned deputy commissioner, and representative from the local community. The deputy commissioner should be the focal person and should be responsible for execution of the welfare schemes under the CSR obligations.