Press Release, Nov. 8, 2013.

Pakistan GasPort Limited rejects as patently false the recent, speculative claims issued by Elengy Pakistan Terminal Limited (ETPL), a wholly-owned subsidiary of Engro Corp., regarding the latest LNG tender in which only these two companies participated.

ETPL claims to have offered “the most competitive price” proposal for the tender overseen by Inter Gas Systems Limited (ISGS). It claims that its “tolling price” is “extremely low”—at “less than $0.70/mmbtu”—and that this is “much below” PGP’s price of “$2.5/mmbtu.” The fact is that ETPL cannot have any knowledge of PGP’s price offer, which remains sealed. PGP’s offer to ISGS is certainly not “$2.5/mmbtu,” and ETPL’s claims constitute an ungainly attempt to justify what appears to be a predetermined bidding outcome.

ETPL’s alleged, intimate knowledge of the evaluation process that PGP was subjected to betrays a collusive proximity to personnel involved in the scrutiny process.

ISGS, through its short letter of Nov. 6, informed PGP that its multibillion-dollar consortium had not been prequalified. This letter neither delves into the specifics of why PGP had not been qualified nor was this communication copied to ETPL. Yet, ETPL claims PGP was disqualified because it did not factor in its bid a “42-inch branch pipeline” and because its EPC contractor “does not have the capacity and the experience to undertake projects of such nature and complexity.” Both claims are demonstrably false. Furthermore, PGP’s EPC contractor, Worley Parsons, has undertaken more than half of the world’s near-shore LNG projects—projects exactly similar to the one tendered.

ETPL concedes that the EPC contractor is a critical component for qualifying for this tender, but fails to apply the same self-acknowledged standard to its own bid. It is a fact acknowledged by ETPL that its EPC contractor, China Harbor Engineering Company Limited (CHEC), remains blacklisted by the World Bank until 2017. But ETPL says CHEC’s blacklisting is “irrelevant,” that Transparency International Pakistan’s (TIP) observations against CHEC are “worthless,” and that PGP had participated in the previous tender with CHEC as a partner.

Importantly, the previous tender did not contain specific, exclusionary provisions that the current one does. Section 33.2 of the LNG Services Agreement unequivocally states that no company or its affiliates or agents may participate in the process if they “appear on any list of entities or individuals debarred from tendering or participating in any project funded by the World Bank, European Bank of Reconstruction and Development, or any other multilateral or bilateral aid agency.” As such, in accordance with the tender documents, CHEC cannot participate in this project. Declaring otherwise is both false and in blatant violation of Public Procurement Regulatory Authority (PPRA) rules and tender requirements.

ETPL also claims that it is “religiously following the highest international ethical practices.” These ethical standards were apparent during the previous LNG tender, which was overseen by Sui Southern Gas Company Limited (SSGC). Despite being disqualified by SSGC’s foreign evaluators, QED Consulting, SSGC’s then-chairman controversially maintained that not only was ETPL qualified but that it had, in fact, won the tender. ETPL failed to mention that the then-chairman was also a paid director on the board of ETPL’s sister concern—a clear conflict of interest that led to the chairman’s resignation.

QED also advised ISGS on the current tender. ETPL claims that “after its disqualification, PGP is now issuing complaints against QED, although they had approved of them previously.” First, PGP’s written reservations to the Ministry of Petroleum and Natural Resources about ISGS and QED predate the “disqualification.” Second, ETPL had itself publicly objected to QED during the previous LNG tender after its own disqualification. “Why have foreign consultants if our own [SSGC] experts can do the tabulations correctly!” ETPL’s chief executive told reporters in March. He also described QED’s work as “poor analysis.”

While ETPL’s press statement suggests it is in possession of certain, sealed documents PGP submitted to ISGS, PGP’s exhortations to ISGS to make public all documents and government records pertaining to the bid—as required by law—have gone unheeded. Under PPRA Rules 35 and 47, ISGS is required to “announce the results of bid evaluation in the form of a report giving justification for acceptance or rejection of bids at least 10 days prior to the award of procurement contract” and to “as soon as a contract has been awarded … make all documents related to the evaluation of the bid and award of contract public.” This data is required to be disclosed without any alterations or redactions on a timely basis.

In the absence of this data, ETPL’s so-called “most competitive price” proposal cannot be scrutinized by PGP, the media, or the public. ETPL, in the previous tender, made over two dozen unilateral and material deviations from the tender documents and offered a price formula instead of a firm price. The compliance of its current price offer cannot be established in the face of our lawful requests for disclosure being stonewalled.

In the interest of the public good and savings to the national exchequer, PGP has maintained from the outset that the bidding process must be conducted transparently, without undue haste, and in strict compliance with PPRA rules and the law in order to ensure its implementation and long-term sustainability. PGP remains firmly committed to these objectives.