PSGP talks: No more deviations from issues settled in IGA, Moscow tells Islamabad

ISLAMABAD: On the second day of talks on shareholding and facilitation agreements for $3 billion worth Pakistan Stream Gas Pipeline (PSGP), the Russian and Pakistani negotiators made some progress, as the parleys remained well-directed amid hopes there would be a breakthrough by today (Thursday).

Moscow was represented by Vladimir Shcherbatykh, Evgeniya Neimerovets, and Anisat Bairkhanova with more officials on video from Russia while Nadeem Bajwa, MD ISGS, Syed Ali Zikria, Joint Secretary in Petroleum Division, and Faisal, a CLM lawyer, Aurangzeb, an ISGS lawyer and Amir Khan, CFO ISGS, represented Pakistan in the talks.

According to a top official privy to the talks, both sides discussed and made some positive progress on general outlines and parameters for the transportation tariff. They also discussed the concessions from the Government of Pakistan, and also advanced on the issue of dispute resolution. Both sides also made some progress on clauses related to lenders. The official said that both sides are most likely to reach a general agreement on shareholding and facilitation accords, today.

However, the Russian negotiators on Wednesday asked their Pakistani counterparts to avoid deviations from the agreed and notified decisions and stick to the newly-amended IGA (Inter Governmental Agreement), a senior official who is also part of the talks told The News. The commercial and legal experts from Russia came up with the above observation when they asked as to who would be responsible for any delay in the project’s CoD (commercial

operational date) including the acquisition of land for ensuring the project’s right of way?

The Russians argued that the Government of Pakistan will be responsible for the delay mainly because of land acquisition and in this scenario GoP will have to compensate them (Russians). At this, the CLM lawyer representing the Inter-State Gas Company (ISGS) said that in case of delay Special Purpose Company (SPC) will indemnify the Government of Pakistan.

The Russians counter-argued that SPC is to be a private company having directors both from Pakistan and Russia, and therefore cannot indemnify the GoP.

The GOP can indemnify the company for the delay as many departments directly run under it and the issue of acquiring the land also directly falls under GOP’s jurisdiction. The Russian delegates underlined that since all these issues are settled in the amended IGA, deviations are not simply acceptable, reminding the Pakistani counterparts of deviations related to Islamabad’s 74pc shareholding by Russian financing, when the IGA was inked. Pakistan initially got a clause included in the agreement to use GIDC (Gas Infrastructure Development Cess) to fund its 74 percent shareholding in the pipeline project and later sought Russian loans for that.

They protested that now once again the Pakistani negotiators want to commit deviation by holding the SPC responsible instead of the Government of Pakistan for the delay in the project’s CoD (Commercial Operational Date). However, later on sense prevailed and the Pakistani side decided not to go for more deviations.