News
Friday, November 18, 2011
SC orders rental company to return all money or face action* Court informed that Reshma rental power company has returned Rs 2.5 billion
* Chief justice notes NEPRA has failed to point out violation of rules in RPPs deals
Staff Report
ISLAMABAD: The Supreme Court was informed on Thursday that Reshma Rental Power Plant had returned Rs 2.5 billion, which was taken as 14 percent mobilisation advance.
A two-member Supreme Court bench, comprising Chief Justice of Pakistan Iftikhar Muhammad Chaudhry and Justice Khilji Arif Hussain, directed the owner of the plant to return the rest of the money with markup as well.
The court expressed concern over the payment of customs duty by WAPDA in the import of machinery for Rental Power Plants (RPPs), after it was informed that the Ministry of Water and Power had paid Rs 65.18 million as duty on the import of machinery for nine RPPs, including Rs 36.74 million for the machinery of Karkey Power Plant.
The court also directed National Electric Power Regulatory Authority (NEPRA) to produce details of reference tariff and generation tariff of the RPPs till today (Friday).
He said it was astonishing that the company was paid such a huge amount about 30 months ago, however, no one bothered to ask the company that why it was not producing the electricity.
The chief justice noted that NEPRA, which was a national institution, had also pointed out that rules and regulations were violated in the deal of RPPs. He said that the authorities concerned were asked by NEPRA to review the deal of RPPs, however, no heed was paid towards the matter.
The chief justice said that the court would take action against the people who caused huge losses to the national exchequer through the RPPs deal. During the hearing, Pakistan Electric Power Company (PEPCO) official informed the court that WAPDA paid customs duties of the machinery imported for RPPs.
PEPCO Managing Director Rasul Khan Mahsud said that he had written letters to the banks for return of guarantees. “How can the banks refuse to return the advance payment,” the CJP inquired. Rasul said if the court ordered, the banks would release the advance payment.
He said many companies besides receiving 14 percent mobilisation advance had not produced electricity.
During the hearing, the chief justice said that the credit of recovery of over Rs 7 billion from the RPPs would go to Faisal Saleh Hayat.
In his arguments, Faisal Saleh Hayat criticised the role of NEPRA, stating that though the counsel for NEPRA had now admitted that the contracts of RPPs were non-transparent but his department had never objected to this project during that time.
He said the contracts of five RPPs were awarded to Iqbal Z Ahmad on the basis of favouritism and the government had given him undue favour in these contracts.
He said the National Bank of Pakistan headed by Ali Raza sanctioned loans to the government for RPPs and in return Ali Raza was given LPG contracts.
He also said the government in rent has to pay Rs 95 billion to Karkey and Reshma power plants – Rs 60 billion to Karkey and Rs 35 billion to Reshma – over the period of five years, but does not have money to pay for the fuel to IPPs.
Courtesy www.dailytimes.com.pk