Balochistan: Gwadar port contract is ‘confidential’, federal secretary informs Senate panel

ISLAMABAD: A Senate panel on Thursday was taken aback when a federal secretary declared that the contract governing affairs of the Gwadar port was “confidential” and its details could not be disclosed publicly.

The Senate standing committee on finance led by Senator Farooq Hamid Naek on Wednesday had asked federal Secretary of Maritime Affairs Rizwan Ahmed to share copies of contracts and related documents on award of contracts and sub-contracts regarding Gwadar free zone.

Mr Rizwan replied that the documents could not be shared with the Senate committee chairman and read out one paragraph from the agreement which says the contents of the agreement will be kept confidential.

The issue has been under discussion at the standing committee for the last three days in the wake of the government’s inclusion of tax concession ordinance in the finance bill 2020. The bill has expired after a one-time extension.

Copies of agreement will be given to committee during in-camera meeting on Tuesday and then taken back

Senators Dr Musadik Malik, Ayesha Raza, Talha Mehmood and Ateeq Shaikh expressed their anger and displeasure when the secretary said that copies of the contracts could not be shared even with legislatures.

To pacify the senators, the committee chairman suggested having an in-camera meeting in which copies of the documents would be shared for one hour and then recollected.

Senator Ateeq told the secretary that he could not dictate to a senator. Mr Rizwan replied that he was informing the chairman of the committee.

Finally, the secretary agreed that he would share copies of the contracts with the committee members on Tuesday. “The copy will be shared at 10am before the start of an in-camera meeting at 11am,” the secretary said, adding that the copies would be recollected soon after the meeting.

On the website of the ministry of maritime affairs, Mr Rizwan has mentioned in his profile one of his major achievement as the federal secretary as being ‘the main facilitator in resolving the matter of granting tax exemption to the China Overseas Ports Holding Company to facilitate the establishment of its industrial units at Gwadar Port, an issue pending since seven years prior to his appointment”.

The government had signed a contract over Gwadar port with a Singaporean company in 2006, which was later given to the Chinese company in 2013. The need for the sharing of copies of the contracts was felt when contradictory statements came from the maritime ministry.

“We just want to review these contracts to confirm whether these exemptions can be allowed for 40 years,” Senator Naek said.

The secretary informed the committee that the copies of the contracts had never been shared with the legislature in the past.

The committee members also showed displeasure over the list of contractors and sub-contractors. Mr Rizwan responded by saying that the government had no role in the award of the contracts to contractors and sub-contractor. “I have requested the relevant authorities to provide me the list of the contracts,” he said, adding that after receiving the documents he would share them with the committee.

The secretary said that he would request the relevant authorities for further confirmation of the list of contractors and sub-contractors. Senator Naek said that this list should be shared with the members with all details. Senator Musadik said that the committee would like to know who the contractors were for considering tax exemptions.

Senator Mohammad Ikram said that he was not expecting that huge tax exemptions would translate into development of Balochistan. He said the Singaporean company had carried out no development activities in the area.

Secretary Rizwan explained how efforts were made to convince the Federal Board of Revenue to allow the tax exemptions. He said that some parts of the concessions had already been notified through the finance bill of 2016.

On repeated questions, the secretary said that there were other contracts as well which were confidential like the one of the Karachi Electric Supply Company. Senators Mohsin Aziz and Zeeshan Khanzada supported the views of the secretary.

At the outset of the committee meeting, its chairman read out a brief statement in which he said that the committee supported Gwadar port and linked China Pakistan Economic Corridor projects. He said that the committee was a supporter of the previous governments’ commitments and the one made by the incumbent government.

Earlier, the committee reviewed the public finance act 2019 and asked the ministry of finance to explain the definition of non-tax revenue. The committee suggested improvement in the constitution of the policy board for the audit. The committee also approved various amendments to the income tax law.

Published in Dawn, June 19th, 2020