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SSGC stops LNG transmission for fertiliser

manufacturer
By Zafar Bhutta
Published: October 14, 2017

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LNG Terminal. PHOTO: REUTERS

ISLAMABAD: Higher tolling charges for handling liquefied natural gas (LNG)

imports have sparked a dispute between the Fatima Group and Sui Southern
Gas Company (SSGC) as the state gas utility is not willing to transmit
imported gas until outstanding payments are settled by the fertiliser
manufacturer.

The dispute surfaced in a meeting held last month where the Fatima Group
complained that their issues with Sui gas companies pertaining to LNG
imports and their handling fee had not yet been resolved and they required an
amicable solution.

Responding to that, the managing director of SSGC argued that Fatima

Fertilizer – a company of the Fatima Group – fell in Sui Northern Gas
Pipelines Limited (SNGPL)’s jurisdiction and it would handle the LNG cargo
arranged by the fertiliser company.

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Regarding LNG re-gasification charges, he said SSGC had already paid the
terminal charges approved and notified by the Oil and Gas Regulatory
Authority (Ogra) to Elengy Terminal Pakistan Limited (ETPL), which receives
and re-gasifies LNG at its terminal at Port Qasim.
He emphasised that until outstanding payments of around Rs2 billion including
Rs1.3 billion in actual fee and Rs667 million in late payment surcharge were
settled, SSGC would not be in a position to transport gas for Fatima Fertilizer.

A representative of the Fatima Group countered that SSGC had unilaterally

built up the outstanding amount and the late payment surcharge with which the
group did not agree.

He said they had paid $0.66 per million British thermal units (mmbtu) in re-
gasification fee, but after a revised Ogra notification, SSGC charged them an
extra amount at the rate of $1.43 per mmbtu. “This is not acceptable,” he said.

He stressed that the Fatima Group was ready to pay Rs978 million based on
the old fee of $0.66 per mmbtu.

However, the SSGC managing director said the Fatima Group needed to pay
the Ogra-notified fee.

During the meeting, it was asked whether some term sheet or agreement was
signed by SSGC and Fatima Fertilizer before processing LNG imports.

The SSGC MD replied that it was initially apprehended that SNGPL would be
forced to bear the re-gasification charges, but there was no agreement in place.
He said SSGC was a public sector company and it could not move along with
huge outstanding bills.

The MD said they had paid terminal charges as per actual ETPL fee and the
same need to be paid by the Fatima Group.

It was suggested during the meeting that past issues should not affect future
projects and a standby letter of credit could be obtained from Fatima Fertilizer
to cover future re-gasification charges.
However, the SSGC managing director said they could not proceed further
unless pending fee was cleared by the Fatima Group.

Responding to the request for comments, an SSGC spokesperson agreed that

there was a dispute over payment of re-gasification charges as the Fatima
Group paid $0.66 per mmbtu whereas they had to pay actual charges as
notified by Ogra.

“SSGC management is in contact with the Fatima Group and the Ministry of
Energy (Petroleum Division) is also playing a role to resolve the issue. SSGC
will transmit their future cargoes once they come up with a concrete payment
plan and provide security (standby letter of credit) for future cargoes,” the
spokesperson said.

The Fatima Group did not respond to the request for comments.

Published in The Express Tribune, October 14 th, 2017.

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FBR submits scathing report of ‘corruption,
inefficiency’ in its department
THE EXPRESS TRIBUNE > BUSINESS
 

FBR submits scathing report of ‘corruption, inefficiency’ in its department

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FBR submits scathing report of ‘corruption,

inefficiency’ in its department
By Shahbaz Rana
Published: September 28, 2017

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PHOTO: Reuters

ISLAMABAD: In an alarming situation that indicates patronage of officers

from the top, hundreds of tax officials facing inquiries on serious charges of
corruption and inefficiency are serving at key positions in the Federal Board of
Revenue (FBR).

The revelations are part of a report the FBR submitted to a parliamentary body
that has taken up the issue of ‘no action’ against corrupt FBR officers. The
report suggests the apparent indifference by the FBR top management towards
corrupt officials, who, despite facing inquires, are serving at key posts.

In most cases, the charges of corruption and inefficiency against these officials
have been proven. Some of them have obtained stay orders.

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Corruption, tax evasion on the rise: FBR official

One of the prominent cases is the one where no action has been taken against
officers who were accused in the multi-billion dollar corruption case of over
7,000 missing containers of US-led International Security Assistance Forces
(ISAF) and NATO, and clearance of imported wheat without payment of
duties.

Where it had to take any action, the FBR shifted the entire burden on low-
grade officers to save the skins at the top level. In many cases where the
officials enjoyed clout, the FBR adopted a vague procedure for taking
disciplinary action against them and is now seeking ex-post facto approval
from the Prime Minister, showed the report.

The Senate Standing Committee of Finance has taken up the issue of non-
provision of details about the officers who were facing inquiries as of
November 2015 under Efficiency and Disciplinary Rules of 1973. The
November 2015 cut of date is critical, as the federal government had
completely reshuffled the then top FBR management, which was headed by
then FBR Chairman Tariq Bajwa.
Bajwa had enjoyed a good reputation and took aggressive action but after his
transfer inquiries have been put at the backburner.

A recent report of the World Bank claimed Pakistan suffers a loss of Rs3.2
trillion annually due to weak administration and non-compliant taxpayers.

In a classical case highlighting protection available to corrupt officers, an

inquiry against Basharat Ahmad Qureshi -a grade 20 officer – for a loss of
Rs1.2 billion was launched in 2013. The officer gave illegal tax benefit to Pak-
Arab Fertilizer Limited and Fatima Fertilizer Limited, according to the FBR
report. But the matter remains pending. In January 2015, he was posted as
Commissioner RTO-III Karachi.

Another interesting case is that of Muhammad Sharif Awan who is a grade 20

officer. The FBR had proved the charge of ‘holding assets beyond means’
against him but still in February this year he was posted as Commissioner
Appeals in Karachi RTO.

The FBR has proven the charge that Shahar Bano Walajahi – a grade 20
officer – gave undue favour of Rs429.8 million by deleting a demand that she
herself generated after going through the record. The officer has obtained a
stay order from the court. Despite lapse of four years FBR has done nothing
significant in the case.

Why are we failing to end corruption?

Similarly, in the case of Shah Bano Khan the inquiry report is awaited for
three years on allegations of giving Rs13.9 million benefit to a taxpayer.

The charges of inefficiency and misconduct were approved against Abdul

Hameed Abro but the punishment was stoppage of increment for two years.
The FBR proved the charge of payment of bogus tax refund against its officer
Jawhar Ali Shah and the punishment was only reduction to a lower stage in his
own grade.

Junaid Usman Akram -a grade 18 officer – had been terminated from service
in 2010 after it was established that he indulged in corrupt practices that
caused a loss of Rs37.7 million. The court had ordered reinstatement of the
officer while directing to hold a fresh inquiry. He was appointed as deputy
director post-clearance audit this month. The FBR’s top management’s
protection to the officer can be gauged from the fact that it did not appoint an
inquiry officer for seven months. The FBR finally appointed an inquiry officer
in February 2017 but the “inquiry is still under process”.

The FBR took years to take a decision against Mustafa Kamal -a grade 19
officer of Inland Revenues, who was finally removed from service last month
on allegations of hiding his assets.

Shamsuzzaman had been accused of misconduct and corruption in a case of

Rs29.3 million loss to the exchequer in March 2015.

In a glaring case, a grade 18 officer Syed Shoaib Raza was found guilty of
mis-declaring his assets in April 2015. At that time he was serving in the
Directorate of Transit Trade. The action taken against him was that the
incumbent Secretary Revenue Division exonerated him in July. In March 2016,
he was appointed as Deputy Director Customs valuation.

Nazir Ahamd Qureshi had been accused of corrupt practices, as he replaced

high value seized mobile phones with low value handsets. He was given a
punishment of withholding two annual increments. Qureshi is now senior
preventive officer in Karachi and enjoying a double salary since March this
year.
However, four officers of grade 16 who were found guilty of wrong
assessments of imported consignments were given penalty of two time scales
demotions. But they were not removed from their positions. They were
principal appraisers and examiners, which are considered a “cash posts” in the
FBR.

Five principal appraisers facing allegations of corruption were exonerated after

two years.

Taxmen as corrupt as society: FBR chief

In a case that had created ripples in the political circles, the FBR did not take
sufficient action against its five officers who cleared imported wheat without
collecting regulatory duties. The consignment had been imported by a well-
connected business tycoon in December 2014. The FBR had imposed minor
penalty of withholding annual increment against Asad Aleem, Principal
Appraiser Port Qasim Karachi, but the FBR subsequently withdrew the penalty
while showing leniency in August last year.

In the infamous case of 7,000 missing ISAF and Afghan Transit Trade
containers between January 2008 and June 2010, the FBR has not taken any
action and the matter remains pending for the last three years. There were 76
officers of two collectorates of the FBR’s Model Custom Collectorate (MCC)
Peshawar and MCC Quetta were involved in the case. The Supreme Court had
taken a suo moto notice of the matter.

Interestingly, all the accused officers are in grade 16 and no top ranking officer
is mentioned in the report.

The FBR has given a vague response that “inquiry report has been received
and case is subjudice before the SC and is under investigation with NAB
authorities as well as Directorate General of I & I FBR”.
Officers who were accused of corruption in NATO containers case not only
got promoted but some of them have retired from service.

Probably, irregularities in implementation of the amnesty scheme 2013 were

the only case where the FBR imposed a major penalty of compulsory
retirement of service in May 2017 and upheld its decision. However, in this
case too no high ranking official was taken to the task.

In serious cases such as clearing goods at lower duties only minor penalties
like stopping annual increments were imposed on the officers.

Published in The Express Tribune, September 28 th, 2017.

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