ISLAMABAD: The Pakistan National Shipping Corporation (PNSC) has refused to incorporate required changes in the Contract of Afreightment (COA) with Pakistan State Oil (PSO). The PSO had sent a comprehensive revised draft of contract to the PNSC, covering all the areas of concern.
The Federal Minister for Ports and Shipping told Customs Today that the PSO signed an agreement with the PNSC five years ago for transportation of furnace oil from designated ports in Arab Gulf to Pakistan.
An Addendum to the COA was also executed between the two organisations to include transportation of PSO’s Motor Gasoline (Petrol) and Low Sulphur Furnace Oil (LSFO) cargoes from different ports of the world to Pakistan. Therefore, the PSO was directed to import petrol and LSFO on C&F basis while import of High Sulphur Furnace Oil (HSFO) was continued on FOB basis through PNSC.
The source said that neither any tender process was involved nor was any award issued in this regard. PSO and PNSC, being public sector companies, reached to an agreement and signed the said COA. However, during execution of the contract, PSO faced several issues including in-transit quality assurance of the cargo, freight rates as per market, timely provision of vessels by PNSC and penalties and protection etc to PSO against non-performance of PNSC.
The source said that in order to address the above issues, upon expiry of the first phase of the contract PSO sent a comprehensive revised draft of contract to PNSC covering all the above areas of concern, but PNSC did not agree to incorporate required changes in the contract despite PSO’s vigorous follow-up and meetings with PNSC for about two years.