Sixteen years after having pleaded guilty, David Walters (read Walters Power International) has made headlines for the wrong reasons, miles away from Oklahoma, where the company is based. The company has agreed in writing to submit to the Supreme Court order of returning $11.8 million with interest it received as advance mobilisation for the controversial rental power plant at Nauderu.
It can be only a coincidence that WPI happens to be partners with Pakistan Power Resources, a group owned by the famous Iqbal Z Ahmed, who is also known for his close relations with the honourable President of Pakistan.
That is not to say that PPR and WPI were awarded the contracts based on close connections, as the government had clearly mentioned that there was no favouritism in awarding RPP contracts. Surely, the governments words especially when they come from the power ministry are to be taken at face value.
WPI, on the other hand has blamed the Central Power General Company and plans to file a $14 million damage suit for delaying the approval of tariff and not providing the gas earlier agreed upon. Regardless of the illegal practice of shifting the plant from Guddu to Nauderu, the ministry should share the blame for not carrying the process smoothly as it was decided last year in an ECC meeting.
Moreover, the Ministry of Power in the first place should never have allowed rental plants based on gas, given its acute shortage. Even the ADB in its audit report raised reservations on permitting of gas-based plants and had suggested the government to do away with such plants.
It should be kept in mind that in the case of not being able to provide the fuel as per agreement, the rental capacity payments would still have to be paid irrespective of power generation, which would simply add burden on the exchequer (read consumers).
Another thing that the Supreme Court should take into notice is the penalty on late commissioning in Nauderu plants case are inconsistent as earlier pointed by the ADB in its audit report. The plant was due to commission in June 2010, but the penalties in Nauderus case were relaxed three times, which is a potential loss to the government kitty.
Another massive contradiction to the Nepra guidelines is the age of the Nauderu plant which according to the WPI has a useful life of 30 years and a remaining life of four years. It is pertinent to note that Nepra guidelines require the plant to be less than 10 years old.
For sure, the Supreme Court will be quite busy in the future as there are a few other RPPs in line to face the music on charges of irregularities imposed by the countrymen. But, it is time that the relevant authorities sit down and rethink their strategies, instead of defending the RPPs at all costs. There are no short term fixes for the power problems, so bold and brave decisions must be taken to build dams, prioritise the use of gas, improve the power mix, remove the inefficiencies etc.
One hopes that the government does not leave everything for the Supreme Court to deal with and then make hue and cry about judicial activism. The Supreme Court, thankfully, has stated that you will get tired of doing corruption but we will not tire taking notices. Time will tell whether we will see the guilty punished and not just penalised.