Covert attempts to revive two dead RPPs: Rs 4.343 billion mobilisation advance sought

The Ministry of Water and Power and Pakistan Electric Power Company (Pepco) are reportedly manoeuvring to ensure Rs 4.343 billion mobilisation advance to the two dead Rental Power Projects (RPPs) at Kamonki and Sialkot, well-informed sources in the Ministry told Business Recorder.
Recently, the Minister for Water and Power presented a hurriedly tailored summary to the Economic Co-ordination Committee (ECC) of the Cabinet, seeking approval to pay Rs 4.343 billion mobilisation advance (seven percent of total cost) to the Kamonki and Sialkot RPPs and scrapping of Walters and Pakistan Power Resources (PPR) projects. However, Minister for Finance, Dr Abdul Hafeez Shaikh, backed by Secretary, Cabinet Division, Nargis Sethi said to have criticised Naveed Qamar for not getting comments from the Ministries of Finance and Law.
According to official documents, the ECC took serious note of presentation of summaries without seeking comments of other stakeholders and directed all the ministries to follow the Rules of Business, 1973 in this regard. "The Ministry of Water and Power and Pepco are trying to give life to the already dead RPPs in a hush-hush manner and that too against all clauses of the relevant Rental Services Agreements (RSAs)," sources further revealed as having been said during the ECC meeting.
A senior official of Finance Ministry confirmed to this correspondent that a move by the Ministry of Water and Power to pay mobilisation advance to Kamonki Energy and Sialkot rental power plant, was shot down by the Finance Ministry. In a suo motu case, the Supreme Court of Pakistan had ordered implementation of RSAs and cancellation of RPPs that failed to achieve CoD as per agreements.
It was in this context that the sponsors of 50 MW Naudero II, 127 MW, Guddu, 150 MW Techno-E-Power Sahuwal, 150 MW Techno-E-Power Samundri Road Faisalabad, 150 MW Young Gen Sattiana Road Faisalabad, and 201 MW Reshma Power were required to immediately return their advances amounting to billions of rupees.
It was understood that return of mobilisation advances would also require cancellation of the projects. The sources added revival of these rental plants would necessitate renegotiations of the rates to ensure the lowest bid price. Insiders revealed that the rate for the 62 MW Gulf Rental Power Plant was 3.47 cents while that being claimed by Reshma Power which was to have achieved CoD on December 31, 2009 and has not been able to even install full plant at site, is a whooping five cents.
The sources further stated that the Ministry and Pepco had failed to recover the mobilisation advance from this defaulting rental plant. As it had not achieved CoD hence no LDs could be levied or recovered. Similar is the situation with the advances made to Techno-E-Power sponsors.
Kamonki Energy was not approved by the earlier ADB audit with an agreed rent of more than five cents, whereas it was proposed to be located near 62 MW Gulf Rental Plant which is charging only 3.47 cents. Pepco has not been able to provide fuel or the required fuel oil SBLC to barge mounted 231 MW Karkey Rental Power Plant, consequent of which it is providing 20 MW or so at Rs 42 per unit. Theses statistics are also available with the National Electric Power Regulatory Authority (Nepra).