Rental power projects: Supreme Court seeks details to examine illegalities in deals

The Supreme Court (SC) on Monday sought from Ministry of Water and Power the details pertaining to Customs Duties levied on import of all Rental Power Projects (RPPs) machinery after consultations with Federal Board of Revenue (FBR). These details will help the court examine illegalities that took place in all the deals.
However, the SC was informed that the government secured a total of Rs 21.84 billion bank loan against the assets of National Transmission and Dispatch Company to pay mobilisation advance to RPPs. A two-member bench comprising Chief Justice Iftikhar Muhammad Chaudhry has been hearing RPPs case.
The bench was told that Reshma Rental Power Project has been issued notice to pay an amount of Rs 1.35 billion as mark-up against mobilisation advance. In case of any failure, the project machinery would be confiscated, the bench was further told. It is worth mentioning that Reshma Rental Power Company has already submitted a pay-order of outstanding amount of Rs 4.53 billion in two instalments pertaining to mobilisation advance without mark-up in pursuance of the November 18 SC orders.
Amicus curiae Anwar Kamal, who wound up his arguments on Monday, apprised the bench that instead of RPPs owners, Ministry of Water and Power imported RPPs machinery on its own after FBR amended the Customs Tariff Act through an SRO. Kamal further argued that as per Customs Act, a temporary exemption to import RPPs was extended for three years only but the contract with Karkey plant was made for five years, adding that the total cost of Karkey plant was Rs 18.5 billion.
According to him, scrapped machinery imported from China was installed as power plant in some localities. At this stage of proceedings, the court was told by Pepco that RPPs were receiving the full amount as per contract, but power generation was not up to the mark and electricity tariff was increased due to reduced power generation in the country.
The Chief Justice questioned why tariff was still determined in the presence of the fact that RPPs were not able to generate power in accordance with the agreement. He observed that discos were formed to favour blue-eyed persons. Waseem Sajjad, counsel for former Federal Minister Water and Power Raja Pervaz Ashraf urged the court to grant him one day's time enable him to firm up his arguments. The hearing was adjourned till November 22.