Rental power projects case: ‘Govt secured Rs21.84b loan for RPPs mobilisation advance’

Supreme Court asks Pepco to recover Rs1.35b mark-up money from Reshma Power Plant.

ISLAMABAD:

The Supreme Court was told on Monday that the government secured a total of Rs21.84 billion in bank loans to pay a mobilisation advance to Rental Power Projects (RPPs). The loans were secured against the assets of the National Transmission and Dispatch Company.

The SC directed the ministry of water and power to submit details of customs duties levied on the import of machinery at RPPs, after consulting the Federal Board of Revenue (FBR), through which the court will examine if any irregularities and illegalities occurred during the process.

Chief Justice Iftikhar Muhammad Chaudhry, heading the bench, heard the closing arguments of Anwar Kamal. These included the fact that the Reshma Rental Power Project has been issued a notice to pay Rs1.35 billion as mark-up against the mobilisation advance. If this is not paid, the machinery from the project will be confiscated by Pakistan Electric Power Company (Pepco).

Reshma had already submitted a pay order of the outstanding amount of Rs4.53 billion in two installments in the Supreme Court in pursuance of the court orders on November 18. Kamal told the bench that the ministry of water and power imported machinery after amending the Customs Tariff Act through a Statutory Regulatory Order.

Kamal further said that following the act, a temporary exemption to import RPPs was extended for three years, but a contract with the Karkey Plant was made for five years. He added that the total cost of the Karkey Plant was Rs18.5 billion.

The court was told that RPPs were receiving the full amount as per the contract, but power generation was not up to the mark and electricity tariffs were consequently high across the country.

Waseem Sajjad, counsel for former federal minister for water and power Raja Pervaiz Ashraf, asked for an extra day to prepare his arguments. However, the bench did not want any further delays. The hearing will continue on Tuesday (today).

Published in The Express Tribune, November 22^nd, 2011.