Gas infrastructure projects delayed as funds diverted, PAC finds

ISLAMABAD: The Public Accounts Committee (PAC) has issued a directive to the government, mandating an end to the practice of utilising funds from the Gas Infrastructure Development Cess (GIDC) to cover arbitration expenses.

This decision follows the PAC’s discovery that funds allocated for crucial gas infrastructure projects, including the Iran-Pakistan (IP) Pipeline, the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline, and various LNG-related initiatives, are being diverted to cover legal and court-related expenditures.

The committee was informed that a sum of Rs955 million from the GIDC had been expended on the TAPI project and that GIDC funds were also used to cover arbitration costs associated with Iran.

Expressing concern over the sluggish advancement of gas infrastructure projects, the committee noted that this slow pace has resulted in the accumulation of Rs350 billion in unutilized GIDC funds.

The Auditor General’s office reported that only Rs3.7 billion of the funds had been utilized for the operational expenses of Inter State Gas System (ISGS) and the repayment of a loan from Government Holdings Private Limited (GHPL).

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MNA Hina Rabbani Khar proposed that the government reallocate the funds to green energy initiatives or projects more closely aligned with the original objectives of the GIDC.

PAC Chairman Junaid Akbar Khan has given Petroleum Division Secretary Momin Agha one month to present alternative plans for the IP and TAPI projects.

The PAC also issued summons to the chairman of the National Accountability Bureau (NAB) and the Director General of the Federal Investigation Agency (FIA), mandating a briefing on Cnergyico Pk, formerly known as Byco Petroleum. This company has defaulted on Rs70 billion in payments owed to the government.

The matter arose during a discussion concerning an objection raised by the Audit Department regarding the non-payment of petroleum levy and late payment surcharge (LPS) on the sale of petroleum, oil, and lubricants (POL), resulting in a Rs14 billion loss to the government.

Additionally, the committee brought attention to the non-realization of Rs33.9 billion in Gas Development Surcharge (GDS), which had benefitted private fertilizer and power companies that failed to make the required payments.