CCP Conditionally Approves Technology Transfer Agreement Between SSGCL, Itron Related to Gas Meters

The Competition Commission of Pakistan (CCP) has granted a time bound approval to the exemption application for the technology transfer and license agreement between the Sui Southern Gas Company Limited (SSGCL) and US-based Itron Inc. with certain conditions to be complied. The scope of agreement where exclusivity clauses have been allowed by the Commission is between SSGCL and Itron to facilitate the manufacturing of gas meters in Pakistan. CCP in its approval has directed SSGCL to achieve 100 percent localization of gas meters as a result of this agreement along with maximum import substitution through adequate local production of gas meters to meet local demand, including the demand of Sui Northern Gas Pipelines Limited (SNGPL), the other gas utility company in Pakistan. The Ministry of Energy has also issued directions to SSGCL in this regard. CCP considers and grants exemptions pursuant to Section 9 of the Competition Act, 2010, inter alia ensuring that such exemptions have the economic benefits that outweigh the anti-competitive effects of business agreements for any exemption to be awarded. CCP in its exemption has also directed that both parties to the agreement shall make concrete efforts to capitalize on the export potential of the gas meters and apprise annually to the CCP on the matter during the exemption period. The gas meters must be manufactured according to the specifications approved or allowed by the relevant regulator(s) and international standard. The conditions set by CCP while awarding exemption are aimed at promoting localization and facilitating consumer interests in the relevant market besides economic benefits of import substitution to meet the local demand of gas meters with exports potential also.