Associated Group (AG) Chairman and CEO Mr. Iqbal Z. Ahmed has proposed an innovative means to reduce gas theft and transmission losses in Balochistan: offering deserving citizens free LNG.
In an interview with Kanwal Cheema for My Impact Meter, Mr. Ahmed noted a persistent concern among government circles about recoveries, particularly in Balochistan, where every Rs. 100 spent on providing natural gas nets roughly Rs. 20 in revenue, with the rest lost either to theft or transmission losses. “The entire country has utilized Balochistan’s gas reserves without giving them due benefit,” he regrets, adding this can be remedied through efficient use of subsidies.
Noting that there are roughly 300,000 gas consumers in Balochistan, he has advised the government to provide them with one free cylinder of LNG per month. This would prove sufficient for an average family of five, he says, and cut losses that are boosting the circular debt. “Be innovative, do something new, do something for the people,” he advises, maintaining the cost incurred on the government would prove less than the funds lost presently.
Unfortunately, he notes, the plan faces resistance because the default position of Pakistan’s bureaucrats is to reject any plan that deviates from established practice. “This country has great potential,” he says, maintaining Pakistan could become energy-sufficient within three years and even net energy importer if it properly exploits its resources. “This can bring money for the country, attract investment, boost industry,” he says, adding the first step is policy formulation.
Mr. Ahmed has further advised utilizing LNG to power industries, which often complain of hefty utility costs. Noting the fuel could be transported safely via trucks, he maintains the initiative would prove cheaper than prevailing government rates. Unfortunately, he says, there is resistance from vested interests who fear losing their monopoly on the power sector.
Recalling the process by which he spearheaded the entry of LNG into Pakistan, Mr. Ahmed says he approached then-president Pervez Musharraf in 2007, highlighting the looming gas shortage. At Mr. Ahmed’s request an American company gave a briefing on the fuel to Gen. Musharraf, explaining how it is transported and utilized in the national grid. Despite initial resistance from government officials, the president supported the initiative. However, a change in government the next year led to multiple cancellations and revivals for the project.
Ultimately, through a competitive bidding process, Pakistan GasPort Limited’s wholly owned subsidiary Pakistan GasPort Consortium Limited established an LNG import terminal at Port Qasim, Karachi, described as the Rolls Royce of LNG terminals. The $200 million project boasts one of the lowest re-gasification tariffs in the world. It echoes AG’s journey in establishing Jamshoro Joint Venture Limited (JJVL), which enabled the mass uptake of LPG in Pakistan.
Mr. Ahmed recalled that he entered the LPG sector at a time when there were only six marketing companies nationwide. Now, he notes, there are 350, in no small part due to the efforts of AG and JJVL. The JJVL LPG and NGL extraction plant, he says, was established through a competitive bidding process, utilizing technology transfer from the U.S. Crediting the company’s success to assembling a team of young people who learned on the job, he stresses that there can be no success in business without risk.
“You have to have an appetite for risk,” he emphasizes, recalling that he was repeatedly warned that gas fields at Deh Shah Bukhari were on the decline when the JJVL plant was established. No bank was willing to finance the project, as it was dubbed ‘high-risk’ by SSGC and OGDC. “You need to take risk; you can’t stand still. You have to either move forward or fall down,” he says, noting the plant’s commissioning had led to a steep decline in LPG prices and a boost in nationwide consumers.
The wide-ranging discussion between Ms. Cheema and Mr. Ahmed also covered his personal life, with him emphasizing the inculcation of a strong ethic as a precursor to success in both business and life. “You have to temper your abilities with your conditions of life and resist anything which is not in your long-term interest,” he advised. “To achieve something you have to give something,” he continued.
Mr. Ahmed explained that 90% of any business’ success is God’s kindness, while the remaining 10% is everything else put together. “Opportunity is God given,” he says, acknowledging that one must also work for it. “But ultimately, it is the spark that comes to man with God’s kindness that gives you the real burning fire,” he says.
Personal life
The AG founding chairman further dealt into the formation and success of his company. He recalled that he and his father had started out selling scooters at a shop in Lahore. “From that, we became an agent for NEC TVs,” he says, adding the high volume of sales allowed them to set up an assembly plant for the TVs in Lahore, which continued until NEC withdrew from the TV business. Subsequently, Mr. Ahmed entered into the business of tractors with Yugoslavia, which continued until its collapse, preventing the sourcing of required components.
AG finally entered the gas business in 1989 with a small allocation from the Dhakni gas field.
Mr. Ahmed also shared an anecdote about the first time he visited the U.K. in the 1970s. He recalled being denied entry to a theatre because he was wearing shalwar kameez, Pakistan’s national dress, with the usher derisively referring to it as “night dress.” This, he says, is why he only wears shalwar kameez. “I’ve been to the White House, everyone I’ve met from presidents to prime ministers, I’ve worn the national dress,” he says. “That’s my national identity now; accept it or don’t accept it. I’m not just going to wear a suit to impress somebody. You have to be impressed by who I am not by my clothes.”