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18 petrol pump sites fate unclear

THE fate of 18 petrol pump sites, which were made controversial by the Lahore Development Authority (LDA) in December 2010, is yet to be decided because the committee formed by the Punjab chief minister to resolve the issue had met only once.

Sources in the LDA said the CM had stopped the controversial move of re-auctioning of 18 petrol pump sites last month just before two days of the auction. He also constituted a 10-member committee to review the authorityís decision. Punjab Minister Mujtaba Shujaur Rahman was appointed as the committee head while its members included MNA Bilal Yasin, MNA Sardar Ayaz Sadiq, Eng Khurram Dastagir, the Punjab secretary law, member Board of Revenue, principal staff officer of CM Khwaja Imran Raza and representatives of oil companies and the Pakistan Petroleum Dealers Association.

Sources said the committee had met only once in the last week of December 2010. They claimed that the committee had heard the points of view of both the parties and its scheduled meeting on January 6, 2011 was cancelled because of the murder of Punjab Governor Salman Taseer.

The committee was supposed to review the market rates as well as the relevant laws during the next five days of its composition but it had failed to submit any report before the chief minister till now.

Sources said the chief minister also barred the committee from making a final decision on the issue, saying that he would himself decide the case in the light of recommendations of the committee.

The issue cropped up after the LDA failed to timely renew the leases of the 18 petrol pump sites which resulted in a loss of billions of rupees to the national exchequer during the last many years.

The LDA high-ups were also reluctant to initiate any legal or departmental action to fix the responsibility. The LDA sources said the authority should fix the officials concerned responsible for the huge loss because they had failed to perform their duty of ensuring timely issuance of new lease agreements on new market rates.

The LDA had leased out 28 sites to various petroleum companies a long time ago. In December 2010, the LDA had initiated action against 18 such sites by taking over six sites and directing the remaining to remove their infrastructure within the next seven days. The authority did not initiate action against 10 sites because of the pending legal cases. It re-auctioned one of such sites in the Gulberg area and earned over Rs 50 million as advance lease amount for the next three years while earlier, the site was paying the LDA only Rs 600,000 for three years.

The LDA record shows that out of the 18 sites, the PSO had got lease of 14 sites while four sites were leased out to Shell Pakistan.

On the other hand, petroleum dealers claimed that the LDAís action was against ìThe Disposal of Land by Development Authorities (Regulation) Act 1998.î They said Section 4-e(iii) of the Act says, ìsites for petrol pumps or CNG stations shall be leased for a period of eighteen years through open auction; provided that 1) the period of an existing lease may be extended, from time to time, for three years with ten percent per annum increase in the rate of rent, 2) the total lease period, including extension, shall not exceed thirty three years and 3) on completion of thirty three years, the site may again be leased through open auction and the existing lessee may match the bid.î

Khwaja Atif, Secretary Pakistan Petroleum Dealers Association, confirmed that the committee had met once and so far no meeting was called again. He said no intimation was given to the dealers either by the LDA or by the committee.

When contacted, Mujtaba Shujaur Rehman did not attend repeated calls on his cell. The LDA spokesman said the case was yet to be decided and the LDA had also not got any recommendations from the committee.

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