JJVL Refutes TIP Claims

Oct. 22, 2014

Jamshoro Joint Venture Limited takes strong exception with the story “Govt fails to recover over Rs22bn from JJVL” published in the Oct. 22, 2014, edition of Business Recorder. The story is mala fide and, where it does not willfully ignore them, misrepresents the facts.

JJVL regrets to note that Transparency International-Pakistan and the newspaper have failed in their basic responsibility to the public by choosing not to reach out to any of the three parties—JJVL, Sui Southern Gas Company Limited, the Ministry of Petroleum and Natural Resources—that they have so casually disparaged with unsubstantiated allegations and gross misrepresentation of facts for comment or context.

The impugned story and the contents of TIP chairman Sohail Muzaffar’s purported letter, as conveyed in the story, are categorically denied as false and patently misleading.

While the story quotes cherry-picked excerpts from the Supreme Court judgment of Dec. 4, 2013, and remarks from the petitioner, Khawaja Asif, to claim that JJVL owes an amount of “Rs. 22 billion” to SSGC, it deliberately and maliciously ignores some key paragraphs of the verdict.

The Supreme Court did not determine a liability on the part of JJVL. Through paragraph 40(7)(a), it established a two-member committee to “calculate royalty payments (on the LPG extracted to date) on the basis of the Saudi Aramco reference price plus freight, for the full period during which the Implementation Agreement has been operational.” This committee determined a net liability of Rs. 4.2 billion from JJVL to SSGC. Without prejudice to JJVL’s legal position, this liability has been paid. Further, the claim that SSGC paid JJVL “Rs. 5 billion” in September is verifiably false.

The Implementation Agreement between JJVL and SSGC was signed on Aug. 12, 2003—not Dec. 8, 2003, as the story also wrongly claims—and pertains to processing of gas from Badin field. This agreement was signed following a transparent bidding process and two years of negotiations, which have benefited SSGC by Rs. 21.12 billion in surplus income, according to SSGC’s written representation to the Federal Investigation Agency. The FIA report, commissioned by the Supreme Court, is part of the public record.

The judgment, through paragraph 38, also directs that, “The supply of LPG to a very large number of users, including those living in far-flung areas is a matter of public importance impacting their ‘life’ as defined by this Court. Such supply, therefore, needs to continue unabated.” Accordingly, JJVL is continuing to process gas for and on behalf of SSGC, with the approval of the SSGC Board of Directors and the Ministry.

It should be further noted that the act of withholding from NAB vital portions of the judgment and providing false information fall within the mischief of Section 10-B of the National Accountability Ordinance, 1999, read with Section 3(a) of the schedule to the said Ordinance. Providing false information renders a complainant liable to rigorous imprisonment for a term which may extend to five years. TIP should act with a demonstrably high measure of responsibility, diligence and prudence before taking at face value unsubstantiated and blatantly false claims and allegations against companies and investors that are continuing to assist Pakistan in mitigating its ongoing energy crisis.

JJVL represents the largest investment ever made in Pakistan’s LPG sector. JJVL has and shall continue its compliance with all regulatory requirements and the law. JJVL operates on the basis of transparency and shall vigorously protect its hard-earned reputation as the country’s leading producer of LPG against any accusations.

JJVL has referred the matter to its legal counsel for further necessary action.