SC directs for report about production of Rental Power Plants during last sixty days

ISLAMABAD: The Supreme Court on Thursday directed Ejaz A Babar, Finance Director WPPO, to submit report over production of Rental Power Plants (RPPs) during the last sixty days.

It directed that the report be submitted with details about advance payments, total capacity of production, cost on production on per unit, supplied to consumers etc.

A two-Judge bench of Chief Justice Iftikhar Muhammad Chaudhry and Justice Khilji Arif Hussain raised queries after officials from Ministry of Water and Power and Water and Power Development Authority, admitted that international engineers to evaluate imported machinery, could not be appointed.

The Court expressed its wonder as to how could Rental Power Plants (RPPs) machinery worth billions of rupees could escape the inspection process which was pre-requisite under relevant rules.

The bench resumed hearing of a suo motu case taken on application of Syed Makhdoom Fasial Saleh Hayat, a PML-Q legislator and Federal minister for Housing and Works regarding alleged corruption and mismanagement in setting up RPPs.

Another application submitted by Khawja Asif, PML-N member of Parliament, had also been clubbed with the case.

Faisal Saleh Hayat argued that nobody had evaluated the imported machinery of 232 MW Karkey RPP which was paid $564 million in advance for five years period while the production of the plant stood around 25 per cent in these days.

He said a total of $5 billion had been paid in RPPs contracts for generation of 2,200 MW power.

The concerned authorities did not learn form its 2006 failed initiative and the same sponsor was granted further five plants, he added.

Citing a report of the Asian Development Bank (ADB), he said that it had noted that increase in down payment to RPPs was against principles of transparent transaction.

He said the market liquidity risk also increased with payment of 14 per cent in advance.

He said throughout the world the used machinery was easily available and generation of 1 MWs could cost 2,00,000$ but here for generation of 232 MW, a huge amount of $50 million to $60 million had been made.

About the Reshma Power Plant, he said its machinery remained unchecked and the pre-qualification process which was a requirement for shipment of machinery, had escaped the due process.

Karkey Plant was producing 120 MW whle Reshma Power Plant had the current capacity of 64 MW only against total 201 MW, he added.

Currently a total of 226 MW was being added to national grid against expected power capacity of 11,00 MW, he added.

The PML-Q leader said on the other hand, Dong Feng, a Chinese Company was working upon brand new Nandipur power plant which was comparatively less expensive to older rustic RPPs plants.

The Chief Justice observed that they failed to understand why nobody objected to such transaction!

Faisal replied that the then finance minister Shaukat Tareen had objected to the process, besides, he took up the matter in the National Assembly where he moved about a half dozen adjournment motions which were not heeded to.

He said that he was left with no other option but to approach the Court.

The Chief Justice said "Whosoever believe in rule of law, and Constitution, can come to the Court as they cannot deny anyone his or her right."

"Everyone is welcomed who has faith in the Constitution and rule of law," he added.

Faisal said that as a parliamentarian, he felt guilty for not performing their duties properly.

He said that they were consuming Court's time which should be devoted for general litigants.

Faisal said that withholding of tax was also withdrawn to make further favours to sponsors of these RPPs.

He said the apex Court had already held strict adherence to relevant rules in LNG case.

Ejaz A. Babar, an official of PEPCO, to bench's query replied that for inspection of these plants, international engineers had to be appointed.

He said the ECC had decided about import of ten years old machinery but certain parties brought in even older parts.

The Chief Justice told him that the member of parliament was relying upon ADB and Auditor General's report.

"You had asked them to bring in machinery and not the junk," he added.

He said the case had become very clear as nobody cared to carry out physical or site inspection.

Khawaja Asif of PML-N apprised the bench that he also supported arguments of petitioner over these issues.

Saleh further contended that Reshma was also allowed for partial generation which was also violation of the prescribed NEPRA rules.

He said head of GENCO-III (generation companies) was transferred from his post after he served a notice to the Reshma Power Plant chief executive Ahsan Tarrar for return of advance payment in light of the apex Court's directive.

The Chief Justice observed that it was not the first instance, they were witnessing for quite some time that an honest man who was willing to deliver was either transferred or suspended.

"It is totally against good governance," he observed.

The Counsel for NEPRA appeared and contended that they had taken measures against all such malpractice.

Under the rules they could cancel licenses but they had no resources to run these plants, he added.

Further hearing was adjourned till Friday.