In the first week of September, the energy people advised the Energy Ministry to retain a floating regasification unit by extending the contract in view of imminent winter. This would enable the country to have a bigger capacity regasification plant and avoid the winter gas crisis which is now taking its toll. However, under Public Procurement Regulatory Authority (PPRA) rules, no new arrangements can be made unless fresh tender is floated.
So, unfortunately though rightfully, the ministry decided against retaining the larger capacity regasification unit in view of PPRA (Government Procurement Rules) complications that already have implicated several MDs of Sui Gas Authority in NAB/FIA cases. So a relatively low capacity plant was entrusted with the task. As per estimates the share of re-gasified LNG is 8.7% in the country’s primary energy mix, 20% in the overall gas supply, and almost 40% in the volume of gas consumed by the power sector (which, in turn, supplies power to the country).
I could not have read the agreement with Qatar due to the secrecy clause, however, govt-to-govt agreements are exempted from PPRA rules so presumably the extensions and negotiations at any stage are allowed. While spot buying is always high in the high season hence it is supposed to be availed in the low season.
Here again, I presume, the ministry officers did not opt for spot buying during the lean period either due to ignorance of exemption of PPRA rules (as under PPRA rules a tender has to be floated by allowing 15 to 30 days time before bidding) or there has been no lean period lately that could have been availed. On its front, the much bigger consumer India is extending its agreement with Qatar till 2032 by negotiating a lesser price to avoid the volatility of the market that Pakistan is suffering now (again negotiation is not allowed in Pakistan Procurement Rules).
It was known two months ago that #Pakistan will face severe gas shortage. Unfortunately no corrective measures were taken and now the domestic sector is without gas and industrial production is suffering, thus causing further strain on already struggling economy https://t.co/F8GTs2tcr6
— Musadaq Zulqarnain (@MusadaqZ) December 24, 2021
Taking immediate action!
The immediate solution is to buy from spot market no matter what the cost by applying the Emergency Clause of PPRA that allows buying without tender under certain emergency situations. This high cost will take a couple of months unless winter harshness subsides.
Seeing the fact that ex-Advisor to PM and energy wizard Nadeem Babar, a Stanford qualified with dozens of successful energy projects at his credit gave in, I am of the firm belief that energy problem has been caused by procurement rules complications hence a PPRA consultant could have solved this problem like Dr. Irfan, a teacher, and authority on PPRA rules, their exemptions, and applications.
To counter the energy as well other national issues, the government should hire services of a PPRA (Rules) expert for facilitating PPRA rules in gas purchase contracts in favor of public interest which is paramount, leading to immediate restoration of Energy supply as well as long-term energy solution. Consumer Associations should be engaged through govt resources to control general inflation.
Moreover, PPRA rules can be amended by removing complicated unnecessary binding requirements, to the extent of open bidding. It will give govt corporations to compete equally with private companies.
Solutions to Pakistan’s key problems
The government should also amend PPRA rules for the immediate repair of infrastructure in all key cities. A portion of Ehsas payment can be made through lastly elected councilors, no matter which party they belong, for payment to certain needy ones who are technically left out of Ehsaas programme. Balochistan’s problem can be settled by giving Baloch people partnerships in companies like the Kafeel system in UAE and Saudi Arabia.
Making a Committee from the Executive side to assist Judiciary to clear the backlog of 2 Million pending court cases with a clear timeline with vast media coverage for public interest and prompt decisions by the judiciary.
Last but very alarming, recently a suicide was committed by a jobless youth at Lucky Mall, Karachi, and another by a media man caused by frustration at the hands of poverty. To avoid such extreme actions a system of “Missed Call” or WhatsApp messages by frustrated individuals through a media campaign, on a given number, can be introduced under Ehsaas programme arrangements to extend financial assistance to those in need so that they do not resort to extreme actions.
Read more: Is the attempt of commiting suicide a crime?
Mushtaq Jumma is an Ex-Airliner and Business Consultant. He can be reached at firstname.lastname@example.org. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.