Turkey asks Pakistan to go easy on rental power plant

Published: May 22, 2012
PRICE TAG: $565m is the total amount thegovernment will pay to rental
power plants.

PRICE TAG: $565m is the total amount thegovernment will pay to rental power plants.


The government has turned down a request by Turkey seeking relief for a Turkish Rental Power Plant, Karkey Karadeniz, whose accounts have been frozen following Supreme Court’s judgment that cancelled all rental power projects.

The visiting Turkish Economy Minister Zafer Caglyan made the request during a meeting with Commerce Minister Makhdoom Amin Fahim on Monday, an official told The Express Tribune after the meeting.

He said Turkey sought a resolution of the dispute involving the Turkish firm. However, Fahim showed his government’s inability in settling the dispute while arguing that since the apex court had already given its judgment against all rental power plant projects, thus, the government cannot do much, he added.

In March this year the Supreme Court ordered wrapping up RPPs contracts and asked National Accountability Bureau to move against all those who have been involved in striking the deals that many believed became a multi-billion dollar scam.

The government signed a five-year contract with Karkey Karadeniz which had a 222 megawatts generation capacity. The government would pay $565 million on account of rent for producing electricity, according to audit report of the RPPs, carried out by Asian Development Bank on request of the government. The Karkey became controversial when reports appeared in the press that the government was paying millions of dollars to the plant despite the fact that its production was almost nil.

According to an official handout, the Turkish Minister for Economy Zafer Caglyan pointed key concerns of Turkey regarding high taxes, custom duties and matters relating to port and shipping. He also highlighted the investment interest of different Turkish companies for Pakistan and their related requirements.

Pakistan also stressed the need for early finalisation of Preferential Trade Agreement (PTA) between both the countries.

The Turkish government was reluctant to offer preferential treatment on goods that has implications for its trade with European Union, minimising chances for early finalisation of the deal.

Agreements signed in energy and finance

Makhdoom Amin Fahim and Turkish Minister for Environment and Urbanisation Erdogan Bayraktar on Monday co-chaired the 14th Session of Pak-Turkey Joint Ministerial Commission (JMC). The JMC finalised Memorandum of Understandings in the fields of solid waste management, archives, investment, urbanisation, transport and communication and renewable energy.

These agreements would be signed today (Tuesday) in the high level Cooperation Council meeting, co-chaired by Prime Ministers of both the countries, according to a statement by the Commerce Ministry.

During the JMC meeting, it was informed that many Turkish banks were interested to open their branches in Karachi, Lahore and Islamabad and one Turkish bank will start operation in Pakistan very soon.

Turkey also showed interest to provide technical and financial assistance for establishment of small hydropower  plants in Punjab and construction of transmission lines. It will also help formulate regulatory framework and safety codes for coal-based power generation. A Turkish company will start business in petroleum sector. Both the countries have identified fourteen projects in power sector for joint cooperation.

Pakistan and Turkey stressed the need to enhance bilateral trade and investment while agreeing that the current volume was far below than the potential, both countries have.

Both the countries also decided to celebrate 2013-14 as Pak-Turkish Cultural Year.

Turkey also showed interest in vessel tracking system and ship repair and building in Pakistan. Moreover, it was agreed that the existing public sector railway programme between Turkey and Pakistan will be shifted to private sector for its reinitiating, said the commerce ministry.

Published in The Express Tribune, May 22nd, 2012.

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Reader Comments (5)

  • Not me
    May 22, 2012 - 9:06AM

    Karkey rental power plant was a fraud. People of Pakistan have been cheated.

    The government should not mix up good country to country relationship with un-ethical business deals


  • asif ali
    May 22, 2012 - 10:05AM

    power on rent from turkey is not a permanent solution for power shortage. the government should go for long term solution, as we know we have huge resources to generate power in large volume.


  • Truth
    May 22, 2012 - 12:52PM

    Advice to Turks Don’t invest in Pakistan as you’ll get nothing but grief


  • usman786
    May 22, 2012 - 10:34PM

    Truth: . Turks shd not deceive/bribe anyone. They r not offering anything for free eg for Lahore solid waste guideline, they were initially paid USD 500,000 after getting ppra waiver. We could have seeked advice from Urban unit or Punjab Univ but we donot want to listen desi
    Overall they r friends except this rental plantRecommend

  • Freedom Seeker
    May 27, 2012 - 12:12PM

    Pakistanis are still living few centuries back. They still believe in friendship, Muslim brotherhood and relations. But today’s economy is different. Its based on interests and economic stakes but far away from relations. Relations are strong where economic advantages are strong rest is deceiving. We Pakistanis are being deceived by our so called friends in the name of friendship, Muslims brotherhood, and in name of allies.


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