Rauf Klasra and the GDF Suez case

Remember that whole $1 billion loss caused to our nation thing?
Well, it’s not true. If you don’t believe me, read the judgment:

15. Mr. Abdul Hafeez Pirzada, Sr. ASC states that GDF Suez is not involved in any manner in deal causing loss to the nation of Pakistan yet on appearing of the news item and initiation of instant proceedings thereon, has caused damage to its goodwill, therefore, appropriate order protecting its position be passed in this behalf. Mr. Rauf Klasra, Senior Correspondent, daily newspaper ‘The News ’, however, reaffirms the stand taken by him in the news item. Be that as it may, as determination on merits has not been made by this Court to declare the involvement of GDF Suez, no order/observation is required to be passed in this behalf.

i.e. the $1 billion loss claim was a bunch of baloney, but CJ won’t admit it so he’s shifting the goal posts.

Remember Rauf Klasra’s claim that GDF Suez was not part of any bidding process and was suddenly awarded the contract out of the blue? Well, that’s not true either. First read Barrister Ali Zafar’s statement on the matter:

Earlier, Barrister Syed Ali Zafar, the counsel for Sui Southern Gas Company, argued that the Mashal project was an integrated terminal meaning that supply, storage and re-gasification of LNG to be conducted by developer 4-Gas.

“The 4-Gas has proposed the names, among others, of GDF-Suez for the LNG supply and the government negotiated and discussed the terms with them. The negotiated terms for supply of LNG with GDF-Suez were approved by the consultants and a summary was then taken to the ECC,” Barrister Zafar said.

Then the statement of Naim Sharafat of SSGC in the judgment:

therefore, the floating terminal option, offered by the Consortium of 4-Gas, Fauji Foundation and Fotco was accepted. However, in April, 2008 the Fauji Foundation and Fotco withdrew from the Consortium. So far, award is under process. We asked the 4-Gas whether it will continue on the project as on stand on basis, to which they replied that they take the responsibility and will continue on the project. After the price proposal, etc. as the market was very tight and no supply was available, some LNG projects also started in the private sector. For this reason, it was said by the LNG supplier (i.e. Qatar Petroleum, the largest supplier of LNG in the international market and the Foregas has to take supply from it) that it will only deal with the Company having Letter of Exclusivity. Since there was no provision in the tender document for issuance of Letter of Exclusivity, therefore, Ministry of Petroleum after approval of ECC, issued Letter of Support not Letter of Exclusivity on 17th December, 2008, which was valid only for nine months, during which the Foregas had to identify the suppliers and those suppliers had to submit original documents showing their capacity to supply and the period of supply. On 26th August, 2009 these documents were supplied to us. After that Price Negotiation Committee (PNC) was constituted, who also negotiated the matter with Shell, GDF Suez, BP, Total, Woodside and Mitsubishi for supply. Ultimately, best offer was made by GDF Suez for the first six years.

In July, 2009 fresh Expression of Interest was invited for short term supply of LNG on the direction of Minister for Petroleum. At that time Dr. Aasim was Incharge of the Ministry. Letter in this behalf was issued by the Director General Gas to issue Expression of Interest ad for supply of gas for short term i.e. five years. Upon receipt of bids, the same were sent to the Ministry of Petroleum with our reservations over it that it will complicate the situation and both the processes are to be dealt with separately and a clear line is to be drawn between both the processes. However, we received instructions to proceed as such we continued the process. In end of July, 2009, we received ten bids from different companies/consortium including Shell, Fauji Foundation/Vitol, Engro Exel, etc. in response to advertisement made in all local leading newspapers including Dawn, News, Jang, etc. Since it was not the Mashal Project and was short term LNG Project, therefore, we did not involve our Consultant. After general evaluation of these ten bids, we proposed to the Ministry of
Petroleum that Shell Gas & Power is a company, which can supply LNG; secondly we proposed though Fauji/Vitol has offered the package for supply along with terminal, having capacity of 1 million ton of LNG but it is not involved in the LNG business, as evident from their web-site. Since Price Evaluation Committee was constituted in the meantime and it also considered Shell as it was included in the suppliers of Mashal project as well as in short term
LNG project and Fauji/Vitol. These negotiations were only for supplies as it had already been decided that terminal would be of Foregas because it was installing both land based as well as floating terminals; although our main concern was land based terminal but its cost was too high, which would result in high tariff of the gas so we preferred the floating terminal option; we asked to establish floating terminal for 5/6 years and then to convert it into land based terminal. Negotiations were made on price formula and volume of supply; the final result of the negotiations was sent to the Consultants for their opinion; on 22nd January, 2010 they opined that the offer of GDF Suez with regard to medium term supply is very attractive and if there is no other proposal like it, we should go by it (copy of that opinion shall be supplied). They also opined that in case of supply for 20 years, there will be greater risk; the supplier will not take such risk and put it in the price formula as well as we also cannot take risk, but for the supply of 5/6 years there is calculated risk therefore, the cost will be less. The final summary is made by the Ministry of Petroleum, however, we just submit the evaluation report as well as other documents along with our recommendations made in line with the recommendations of the Consultant. We are not involved in the preparation of summary. Since, in the instant case the summary was prepared on the basis of price negotiation and the Price Negotiation Committee, Chaired by Special Secretary, who had all the necessary documents with him, was involved in it and we just forwarded the opinion of our Consultant. So further process was completed by them without our involvement except the fact that I also remained as member of the Price Negotiation Committee after October, 2009. The main recommendation was of GDF Suez for six years as per the quoted price rate, whereafter GDF Suez was offering 1 million ton which could go up to 1.5 million ton per year. Fauji/Vitol had not made any separate offer for supply of LNG alone as their offer made in July, 2009 was for supply with
terminal. The advertisement made in July, 2009 was for supply only whereas the Fauji/Vitol made offer for supply with terminal. It was not recommended as it was not in Mashal Project whereas this summary was for Mashal Project. Though they had made new offer for short term project but they had withdrawn from Mashal Project. Mashal Project is separate and short term LNG Project is separate. We have not considered the Fauji/Vitol in Mashal Project.”

This matches the earlier statement made by the GDF Suez spokesperson on April 21:

Gdf-Suez spokesperson Armelle Dillar through an email claimed that the company has been awarded this long-term contract through an open bidding process by the Economic Coordination Committee (ECC). The email reads: “From July 2009 to January 2010 Gdf-Suez participated in Mashal process to supply Pakistan with LNG and submitted its final offer to the price negotiating committee on January 2010. On the February 9, the company was selected as the preferred bidder by ECC of the government of Pakistan for the sale of up to 3.5mtpa of LNG in the framework of long-term supply contract.”

To summarize, Rauf Klasra’s claim of $1 billion loss to the country was not supported by anything in the judgment. In fact, the Fauji bid, because it included a terminal and not just a supply of LNG, was unsuited to the need at hand. His claim that GDF Suez emerged out of the blue as a supplier of LNG was also untrue. Apparently the GDF Suez CEO told Rauf Klasra that he’s going to sue him for defamation. I hope he does. GDF Suez has also said that it’s going to enter in the new bidding process.

It would be nice if there was one journalist out there who could read the judgment and who had access to the various statements made to the court by everyone concerned and could parse through the wild claims being made by Rauf Klasra and write an objective account of this case. It would be pretty important to read the actual recorded statements because this judgment itself is really unclear. For one thing, the CJ claims that “ommissions” and a “lack of transparency” has occurred but does not elaborate exactly why this is so.

From the very beginning Rauf Klasra has only been interested in defaming all parties concerned. This was his sweeping judgment of Sheikh Waqas Akram and the members of the standing committee on Petroleum which was assigned the task of probing Klasra’s allegations.

ISLAMABAD: A rather distasteful attempt by National Assembly standing committee on Petroleum & Natural Resources to give a clean chit to top government guns involved in a day light robbery in a multibillion dollar NLG deal has put a big question mark over the competency and acumen of politicians to select top judges through a fair process by a parliamentary judicial commission.

Sheikh Waqas Akram answers Klasra’s allegations here:

And there is really nothing in the judgment that contradicts Sheikh Waqas Akram’s claim. Of course Rauf Klasra is arguing today that the only reason the court wasn’t able to prove the $1 billion scam was because the government beat a hasty retreat, which he considers an admission of guilt. Could it be that all the parties concerned are more interested in salvaging what’s left of the project before it’s too late?

After reading about this whole sorry episode, one is left wondering which foreign firm would be crazy enough to invest in Pakistan’s energy sector. If it’s not journalists like Rauf Klasra, armed with leaked documents from god knows where (although given that the Fauji Foundation MD has admitted that after their bid was rejected they contacted the ISI, you don’t have to be a genius to guess the source of the leaks), then it’s WAPDA and its tariff issues driving away investors like the Chinese company Shenhua willing to invest in Thar coal not once, but two times. If that doesn’t work, then it’s Saif-ur Rehman and the Ehtesab Bureau slapping corruption charges on HUBCO executives just so that the government can blackmail the IPPs into accepting a lower tariff because WAPDA is perpetually broke. And to top it all, morons in the media are treating this judgment like it’s the dawn of some kind of new era of judicial independence where the judiciary is checking corruption. Maybe everyone should read about the 1998 actions against HUBCO by the joint efforts of the PML-N government and the LHC which severely damaged the confidence of foreign investors in Pakistan and made a mockery of Pakistan’s sovereign guarantee. Back then, that action was also saluted as a great progress against “corruption” when in hindsight it was simply an exercise in shooting ourselves in the foot repeatedly while under the impression that it was some kind of jihad.

2 responses to “Rauf Klasra and the GDF Suez case

  1. IZ

    What a disgusting worm Klarsa is. Obviously in the pay of the ISI. When it comes down to it, it works to the favour of ISI/Fauji etc. to sabotage the provision of gas and generation of electricity because it helps to build up the narrative of parliamentary incompetence and corruption which will be used to justify their own meddling in the government. Disgusting jackals.

  2. humera zaheer


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