ISLAMABAD: The Economic Coordination Committee (ECC) is set to revisit its decision to grant a 30-year lease extension to Engro Vopak Terminal Limited (EVTL) after Investment Minister Qaiser Sheikh raised serious objections, alleging violations of public procurement rules and warning of adverse impacts on competition in Pakistan’s petrochemical sector.
In a letter addressed to ECC Chairman and Finance Minister Muhammad Aurangzeb, Sheikh protested that his opposition to the lease extension was not recorded in the official minutes of the ECC meeting held on June 5. He argued that the approval of a further 30-year lease without competitive bidding contravenes the Public Procurement Regulatory Authority (PPRA) Rules, 2004, and could create a monopoly in the sector.
Speaking to The Express Tribune, Sheikh confirmed that he had formally challenged the decision and that the federal cabinet had referred the matter back to the ECC for reconsideration. The issue is expected to be discussed at the committee’s meeting on Tuesday.
The controversy comes just days before the expiry of EVTL’s existing 30-year Build-Operate-Transfer (BOT) agreement with the Port Qasim Authority (PQA), which was signed in 1996 and is due to expire this Thursday.
The ECC had approved the lease extension as an additional agenda item during its June 5 meeting. However, Sheikh maintained that EVTL’s unsolicited proposal failed to meet the criteria of being “unique and innovative” under Rule 37-A of the PPRA Rules and therefore should not qualify for a direct extension.
“The extension is against the rules, creates a monopoly, and undermines the promotion of petrochemical industries in Pakistan,” Sheikh stated in his correspondence. He further noted that both the PPRA framework and a PQA in-house assessment committee had concluded that the proposal did not qualify for exemption from competitive bidding requirements.
According to Sheikh, amendments made to the implementation agreements effectively reopened negotiations and bypassed an open and transparent bidding process, granting an undue advantage to the incumbent operator through another 30-year concession.
Government officials indicated that the ECC may reconsider its earlier approval in light of the minister’s objections. The federal cabinet’s decision to return the matter to the ECC has further strengthened the possibility of a review.
EVTL currently plays a critical role in Pakistan’s energy and industrial supply chain, handling more than 60% of the country’s bulk chemical imports and around 55% of marine liquefied petroleum gas (LPG) imports. The terminal is also credited with supporting downstream petrochemical investments and generating significant savings for the national economy.
Official records show that the original agreement required negotiations for any extension to begin at least 10 years before the expiry of the initial lease. While discussions were initiated, they remained inconclusive. In 2021, the PQA Board declared negotiations closed and directed that a competitive bidding process be launched through the appointment of a consultant in accordance with procurement regulations.
In 2022, EVTL submitted an unsolicited proposal seeking an extension. However, a PQA evaluation committee concluded that the proposal was neither unique nor innovative and therefore did not qualify under Rule 37-A of the PPRA Rules.
Despite this assessment, a second round of negotiations was later initiated while preparations for a competitive bidding process continued in parallel. Following amendments to the implementation agreements, both parties reached an understanding on a fresh 30-year extension, which was subsequently approved by the PQA Board and endorsed by the ECC earlier this month.
With the matter now back before the ECC, the future of the lease extension remains uncertain as policymakers weigh concerns over transparency, competition, and long-term sectoral interests.
