Pakistan’s struggling economy is about to get even more bad news as Tethyan Copper Company Pvt Ltd (TCC) has filed damage claims against the government. The claims of $11.43 billion (Rs. 1.265 trillion) were filed by the company in an ongoing case of Reko Diq mining in International Arbitration Court.
The Case and Public Accounts Committee
The Public Accounts Committee (PAC) was briefed about the case and how provincial government’s incompetency and corrupt practices might cause national treasury a huge dent.
The dispute between Balochistan government and TCC caught fire over the distribution of shares in 2009. TCC wanted to keep 75% shares, giving government only 25% which was unacceptable. Then introduction of a Chinese company in the project added more fuel to the fire.
Pakistan May Have to Pay Over $11 Billion as Fine in Reko Diq Gold Mine Case
Pakistan filed application of case dismissal based on malpractices and corruption by TCC. However, they were dismissed in international court stating that Pakistan violated provisions of bilateral investment treaty with Australia. TCC is incorporated in Australia and based on that, claims by Pakistan were put to rest.
The committee also raised serious concerns over change of ownership from one company to two, that was authorized by provincial government. The government allowed distribution of 75% shares between two Australian companies. However there was no such clause of any kind in the agreement that was signed between government and TCC. One member of the committee also told;
The Thursday’s proceedings made it clear that successive Balochistan governments mishandled the case, apparently due to corrupt practices and inefficiencies.
In a detailed hearing, the committee also called upon several experts including Dr Samar Mubarak to have their say on the matter.
Both, the liability and jurisdiction have gone against Pakistan which has further weakened their case. Pakistan has already spent more than $15.5 million on this case in international courts.
The decision is expected to come this year as TCC has several expert financial reports and models to back its claim.