Rental power projects case: Supreme Court reserves verdict on RPPs

CJ questions why government relied on rental power plants when IPPs had the potential of producing electricity.

ISLAMABAD: After six months, the arguments have been concluded. Those waiting for closure in the rental power projects case will have to hold on, however, as the Supreme Court reserved judgment on Wednesday.

The suo motu case relates to alleged irregularities in the establishment and running of the RPPs; unsurprisingly, many were called to have their say. Indeed, before closing the lid on court proceedings, Chief Justice Iftikhar Mohammad Chaudhry and Justice Khilji Arif Hussain heard testimonies from the ministry of water and power, the National Electric Power Regulatory Authority (Nepra), the Pakistan Electric Power Company (Pepco) and the RPPs’ management.

Minister for Housing and Works Faisal Saleh Hayat and Pakistan Muslim League-Nawaz MNA Khwaja Asif had filed petitions alleging foul-play in the affairs of the RPPs.

During the case, the court ordered the the management of several power projects - including Guddu, Naudero and Reshma - to return about Rs10 billion taken from the federal government as a mobilisation advance.

Wrapping up his arguments, counsel for the ministry of water and power, Khawaja Tariq Rahim, said that all agreements with the RPPs conformed to the rules of the Public Procurement Regulatory Authority.

Rahim said there was documentary proof that the process of bidding had been transparent and was overseen by Nepra, the regulator. The chief justice preferred to look at outputs, observing that the RPPs could still not produce even a quarter of the electricity they had agreed to produce.

Appearing on behalf of Faisal Saleh Hayat and winding up his own arguments, Khwaja Asif dismissed many of the RPPs’ claims, such as their view that the increase of advance payments to 14% was due to higher commission charges on the standby letter of credit.

Asif was said the RPPs as well as the government should admit that the power projects were patently against the law and weren’t properly evaluated.

According to Asif, Nepra seemed to be worryingly absent from the decision making process. “Appropriate inquiries into its failure are strongly recommended,” he told the court.

Published in The Express Tribune, December 15^th, 2011.