MUSHTAQ GHUMMAN

ISLAMABAD: The Public Procurement Regulatory Authority (PPRA) has recommended to the Federal Cabinet to approve handling of Reko Diq copper and gold cargoes at the Pakistan International Bulk Terminal (PIBT) Port Qasim without competitive bidding process, well informed sources told Business Recorder.

This decision follows detailed deliberations during two PPRA Board meetings held just a day apart, attended by the Board members and special invitees.

On April 11, 2025, PPRA Managing Director Hasanat Ahmed Qureshi informed the Board—chaired by Finance Secretary/ Chairman PPRA Board, Imdad Ullah Bosal—that the matter titled “Exemption under Section 21 of the PPRA Ordinance, 2002 – Utilization of PIBT at Port Qasim by Reko Diq Mining Company for the Reko Diq Project” had previously been discussed on April 10, 2025. At that earlier meeting, the Board had deferred the matter, citing insufficient justification, and asked the Ministry of Maritime Affairs (MoMA) to submit a revised proposal with the following clarifications: (i) confirmation that the case falls under the definition of public procurement; (ii) justification for the requested exemption; and (iii) explicit mention of the relevant PPRA rule from which exemption was being sought.

Responding to the Board’s queries, Secretary MoMA Syed Zafar Ali Shah clarified that the Port Qasim Authority (PQA)—as a statutory body under the PQA Act, 1973—qualifies as a “procuring agency” under Rule 2(1) of the PPRA Ordinance, 2002, and is thus subject to PPRA regulations.

Rear Admiral Syed Moazzam Ilyas (retd), Chairman of PQA, added that the PPRA Ordinance defines public procurement as any acquisition of goods, services, or construction financed wholly or partly by public funds—unless specifically excluded by the federal government. He emphasized that PIBT was granted a concession in 2010 through competitive bidding to handle coal, clinker, and cement at Port Qasim. Therefore, any addition of commodities—such as copper, gold, and other minerals—would also fall under public procurement and should typically require a competitive bidding process.

In a further communication dated April 11, 2025, MoMA elaborated that the Reko Diq Mining Company (RDMC) had informed the government that the Reko Diq Project is one of the world’s largest undeveloped copper-gold deposits. RDMC is owned 50% by Barrick Gold, 25% by three federal state-owned enterprises, and 25% by the Government of Balochistan (15% on a fully funded basis and 10% on a free-carried basis).

The project is classified as a “qualified investment” under the Foreign Investment (Promotion & Protection) Act, 2022, and is expected to attract the largest foreign direct investment (FDI) in Pakistan’s history. MoMA argued that handling Reko Diq’s cargo through PIBT—following amendments to the Implementation Agreement (IA)—would not only support development of Pakistan’s mineral export industry but also ensure optimal use of PQA’s infrastructure.

MoMA requested the PPRA Board to consider granting an exemption from the competitive bidding process under Rules 12 and 20 of the PP Rules, 2004, in accordance with Section 21 of the PPRA Ordinance, 2002.

The MD (PPRA) further informed the Board that the request was also backed by the SIFC’s Executive Committee, which had met on January 22, 2025. The meeting minutes, issued on February 19, 2025, stated: (i) EC unanimously agreed to provide an exemption allowing PIBT to handle additional commodities, including copper-gold and other natural earth minerals; and (ii) EC directed the Petroleum Division to move the case to PPRA—through MoMA—to seek the exemption and authorize PQA and PIBT to amend their IA to facilitate export on a non-exclusive basis.

The Petroleum Division had also separately submitted a request for exemption to PPRA, in line with SIFC’s directive. These requests were reviewed during the PPRA’s 93rd Board meeting.

After comprehensive discussions, the PPRA Board issued the following decision: “In light of the discussions and requests from the Ministry of Maritime Affairs, Petroleum Division, and the advice of SIFC, the Board recommends that the Federal Government consider granting an exemption under Section 21 of the PPRA Ordinance, 2002, from the applicability of Rules 12 and 20 of the PP Rules, 2004, to the Port Qasim Authority (PQA), Ministry of Maritime Affairs. This would allow PQA to finalize terms of engagement with PIBT for the export (on a non-exclusive basis) of copper-gold commodities including minerals, metals, and other natural earth materials, based on the justification provided.”

However, the Board also emphasized that the procuring agency must protect government interests—particularly with regard to revenue—and ensure transparency, fairness, accountability, and value for money throughout the process.