A Bhutto walks away with lucrative $20m deal

By Rauf Klasra

ISLAMABAD: A first cousin of late Benazir Bhutto - Mehfooz Mustafa Bhutto - has emerged as a central figure in a brewing controversy surrounding the highly questionable contract of $20 million by the Oil & Gas Development Company Limited (OGDC). Mehfooz is the marketing director of the lucky USA-based firm M/s Valerus. Mehfooz Mustafa, reportedly, also shuttled recently between the US and Pakistan to secure this lucrative contract for his Houston-based company.

According to details, the OGDC awarded the contract to Valerus without floating open tenders. The tender was not even posted on the OGDC website and in a classic manner to favour its favourites, the OGDC management allegedly only invited hand-picked pre-selected firms as a formality.

Investigations carried out by The News revealed the OGDC had awarded the contract to Valerus for supply of compressors for the Qadirpur gas field as gas compression was required to stop the field from early depletion. Sources said the contract was given at the time when President Zardari’s close friend, Dr Asim was adviser on petroleum and the de facto federal petroleum minister.

The Public Procurement Regulatory Authority (PPRA) rules prohibit any public sector company to procure any material for any use without floating press tenders and also any tender valued over Rs2 million must be published in the national dailies to ensure transparency and fair play for all the stakeholders. The PPRA is responsible for prescribing regulations and procedures for public procurement.

Talking to The News, former adviser on petroleum Dr Asim Hussain said from Dubai that he had “heard” that the multi-million dollar contract was awarded to a USA-based company. He said he had also “heard” from officials about the cousin of late Benazir Bhutto working in the same US company, but he hastened to add he never met him one-on-one. “It is possible that Mustafa Bhutto might have met me with a large delegation of his company at Islamabad but I don’t remember meeting him one-on-one,” Dr Asim said.

However, Asim said this contract had nothing to do with him nor was he involved in any wrongdoings as far as this contract was concerned.

Basharat Mirza, General-Manager Projects, OGDC, confirmed to The News it was true that the multi-million dollar tender for the compressors was not invited through the press or the official website of the department. Mirza also confirmed it was true that this was the same US company which was given contract where the first cousin of late Benazir Bhutto — Mehfooz Mustafa — was working. To a question, he denied any wrongdoings in the whole process of award of the contract, as he claimed on paper everything was done correctly and since he took charge he did not see any irregularity in the award of the contract. He said the pre-qualified parties were invited to take part in the bidding and the lowest bidding firm was given the contract.

Meanwhile, this correspondent sent an email to Mehfooz Mustafa and his bosses last week, asking both the gentlemen to offer their replies to the attached questionnaire. Both gentlemen have opted not to respond. After a two-day wait, this correspondent repeated the email and waited for another three days before filing this story.

The following questions were forwarded to Mr Mustafa and his boss: 1) Please confirm that the OGDC awarded a contract to your company for $20 million for supply of compression equipment for the Qadirpur gas field. 2) Are you aware that there were no press tenders issued by the OGDC for the contract ultimately awarded to your company? 3) Mehfooz, is this true that you are the first cousin of late Benazir Bhutto and Director International Business Development of Valerus? 4) Please confirm that you are assigned to visit the OGDC for business promotion purposes and you visited Zahid Hussain, MD OGDC on several occasions. 5) Can you confirm that your company paid commission in favour of your local agent through their account outside Pakistan and 6) can you comment that your company is in this business for less than five years.

That Mehfooz and his company have opted to maintain silence over these straightforward questions, speaks volumes about the transparency of this multi-million dollar deal!