AG report on rental power

Allegations of nepotism in the award of the contracts float everywhere. The AG wants the matter fully investigated.

We have been hearing a great deal about rental power plants (RPPs), which, under a government plan, were to add 2,700 MW of power to the national grid system, easing the power crisis we face, even though the cost of power would also rise. We now hear that, according to a report by the auditor-general (AG) of Pakistan, of the 19 proposed RPPs, only one had come online, adding a mere 62 MW of electricity — a meaningless drop in the ocean, given the scale of the power shortfall we face and the disastrous economic impact it is having. Still more worrying is the finding that Rs16.6 billion have been paid out in advance to the RPPs, creating a massive liability of $1.7 billion for the government. The AG has recommended that the contracts of all the companies who had failed to meet their obligations by coming online in time be cancelled.

The situation is certainly a disturbing one. It has also continued for far too long. The RPPs were originally approved under the Musharraf administration in 2006. Thereafter, both the caretaker government that took over prior to the PPP set-up and the current administration carried on with the policy, approving the plan and awarding even bigger contracts. Today, the whole scheme is in a mess. There are contracts that were never signed and others that were never honoured, while some companies are reported to have installed old equipment. Most crucial of all is the fact that nothing has happened to solve our power crisis which, in fact, continues to worsen. Allegations of nepotism in the award of the contracts float everywhere. As the AG has suggested, the matter needs to be fully investigated. It would be unwise to ignore it any longer, given the cost we are paying as a nation for a fiasco that has resulted in both a terrible drain on resources and in a continuing failure to solve the energy crisis, despite the many promises made and the rhetorical statements we have heard year after year, while in reality the situation has rapidly worsened.

Published in The Express Tribune, June 8^th, 2011.