News
Saturday, November 05, 2011
Supreme Court questions feasibility of RPPs* Court directs NEPRA counsel to explain how electricity tariff was determined without examining the machinery of RPP plants
By Hasnaat Malik
ISLAMABAD: The Supreme Court on Friday questioned why the feasibility of the Rental Power Plants (RPPs) was not prepared in a professional manner, directing the counsel for the Ministry of Water and Power to submit the documents indicating policy guidelines over which the federal cabinet had approved these projects.
The court further asked that how could the RPPs’ contracts be awarded without inspecting the machinery on plants sites.
The court observed that out of 19 RPPs only four plants were operational virtually, which were generating 112.41MW of electricity, adding that the national grid system was receiving less than the pledged supply from the RPPs even after receiving payment in billion of rupees.
A two-member bench comprising Chief Justice of Pakistan Iftikhar Muhammad Chaudhry and Justice Khilji Arif Hussain was hearing the case against the alleged corruption in awarding of the RPPs contracts.
During the course of hearing, the court asked Khawaja Tariq Rahim, counsel for the Ministry of Water and Power and PEPCO, that under which policy the RPPs contracts were awarded. The bench also asked National Electric Power Regulatory Authority (NEPRA) counsel Najamul Hassan Kazmi to explain how was the electricity tariff determined without examining the machinery of the RPPs.
The court repeated that no explicit policy was presented by WAPDA and PEPCO before the bench to tackle the prevailing electricity situation in the country. Khawaja Tariq Rahim contended that under Rules of Business (Part-D) the federal cabinet had approved RPPs contracts, adding that the Ministry of Finance and banks declined to pay 7 to 14 percent mobilisation advance to the projects and the matter was referred to the cabinet.
Rahim said that the cabinet decision would be policy under Rules of Business, so the RPPs approval by the cabinet became policy for the RPPs.
The bench asked as to why the government was not supplying oil to the RPPs, adding that what was the policy in paying rent to the projects in the operational and non-operational situation.
Rahim told the bench that the government was buying service from RPPs in term of electricity and in case of service failure they are bound to pay penalty.
On the occasion, the CJP inquired from Kazmi that under what law mobilisation advance from 7 to 14 per cent was given that RPPs received on the basis of reference tariff for the purpose of calculating rent and what was its trickle down effect. Kazmi apprised the bench that after the approval of the bidding, NEPRA determined tariff on the bases of actual cost of the project. The court adjourned the hearing till November 14.
Courtesy www.dailytimes.com.pk