Rental power projects: PAC panel settles 11 out of 12 audit objections

ISLAMABAD: A two-member committee of the Public Accounts Committee (PAC) settled 11 out of 12 pending audit objections against rental power projects installed during the Pakistan Peoples Party (PPP) tenure on Tuesday.

Convener Committee Riaz Fatyana and Naveed Qamar settled 14 audit paras against the RPPs highlighted in the Audit Report for the year 2011-12 of Ministry of Energy (Power Division).

Out of six members only two members attended the proceedings of the committee.

In his ruling, the convener said the references against the RPPs are pending in the Accountability Courts; therefore, the PAC could not take further action on the audit paras.

He said all the audit paras against 11 RPPs stood settled and one remained pending till the decision of the Lahore High Court (LHC).

Audit reports points out the Supreme Court of Pakistan in its decision on March 30, 2012 had declared all transaction/actions pertaining to the RPPs as illegal/unlawful, and directed the NAB to arrange recovery from the sellers.

In compliance with the apex court’s decision, the tentative details of outstanding dues had been provided to the NAB for recovery from the sellers. The recovery action is under process with the NAB.

An official of the NAB revealed that references against 12 RPPs are pending in accountability courts for the recover dues from the companies.

The secretary Power Division revealed that one company obtained stay from the LHC and the government also recovered amount through performance guarantees. The settled audit paras against the RPPs are: irregular rental terms of rental power plants for a period of five years instead of 3+1 years involved $490 million; wasteful expenditure due to non-achievement of commercial operation date Rs8.3 billion; irregular mediation instead of arbitration Rs7 billion; Non-encashment of performance guarantee Rs20 million, non-imposition of L.D $1.2 million, non-reduction in contract price $63.75 million; non-recovery of LD Rs565.7 million, non-encashment of advance payment guarantee and non-termination of contract Rs4.5 billion; non-recovery of liquidated damages $3.6 million, loss due to non-reduction of rental term by 9 and half months $27.75 million; loss due to award of rental contract without competitive bidding $17.630 million; loss due to non-supply of gas Rs1.465 billion; loss due to non-encashment of advance payment guarantee Rs1.338 billion; wasteful expenditure due to unjustified amendment of COD Rs803.269 million; loss due to non-encashment of advance payment guarantee Rs781.6 million; non-encashment of performance guarantee $1.25 million and non-implementation of LD $2.390 million; loss due to irregular change of machinery of 200 MW rental power plant Rs175.9 million and non-recovery on account of advance payment $ 1.47 million.

Copyright Business Recorder, 2021