ISLAMABAD: The Alternative Energy Development Board (AEDB) has issued a letter of intent to JDW Sugar Mills for setting up 52-megawatt co-generation power plants without approval of its board of directors and in violation of the Act of parliament – a move that may cause huge losses to the exchequer.
The issue came to light when AEDB Board Secretary Anwar Ali wrote a letter to Water and Power Minister Khawaja Asif, highlighting alleged wrongdoings by the acting Chief Executive, Dr Basharat Hasan.
The secretary termed the actions of the acting CEO illegal, which could possibly lead to a lot of complications and financial loss to the exchequer.
By using powers of the board in violation of the Act of parliament, the acting CEO of AEDB issued the LOI to JDW Sugar Mills for setting up two 26MW co-generation power plants, according to AEDB documents.
The board had refused to approve the LOI in its 27th and 28th meetings held in May this year. Even caretaker water and power minister Dr Mussadaq Malik did not approve the LOI, the documents showed.
JDW sought the approval for setting up two power plants under a new policy that offers huge benefits such as tariff and duty relaxation on import of machinery.
The letter, written by the secretary, stated that news in the market suggested that JDW Sugar Mills had already got power generation licence, ordered equipment and was in a rush to take benefit of the new policy, which it may not get if the LOI was properly processed, taking a few weeks.
According to the letter, the legal counsel also told the AEDB that the LOI could not be issued without board’s approval. Yet, the CEO issued the letter in total disregard of the decision of the board, the decision of the minister, the advice of the legal counsel and the provision of AEDB Act, it alleged.
The letter said the LOI was drafted according to the desire of JDW and signed in the most clandestine manner. When the irregularity was pointed out, apparently a board meeting was now being planned to cover the moves through retrospective approval.
The letter pointed out that when the board did not approve the LOI in its meetings on May 3 and 9, the charge of CEO was taken back from Syed Tanvir Bokhari, Joint Secretary of Ministry of Water and Power, and was given to Basharat Hasan.
After assuming charge on June 12, Hasan ordered his staff to immediately process the LOI that he eventually issued to JDW on June 17 without approval of the new board chairman, Khawaja Asif, the Water and Power Minister.
Hasan allegedly incorporated the conditions of JDW without any consultation with the Law Division.
The AEDB secretary alleged that changes in the LOI were made in consultation with Rana Naseem, Chief Operating Officer of JDW Sugar Mills.
The LOI was not developed as a standard document but finalised only in consultation with JDW, and after making changes suggested by JDW, different from the original LOI presented to the board.
The secretary said he was under extreme pressure from Hasan to make changes to the minutes of previous meetings to show that the board had in fact approved the LOI. And also to show that the LOI signed was the same as that presented to the board.
When contacted acting chairman AEDB said ,”There is no requirement under the law to get an LOI approved from the board.” However at the same time he said that the LOI has been issued conditionally and when it is taken up by the Board, and if they suggest any amendments those can be incorporated.
When contacted, JDW Group Chief Executive Jahangir Tarin confirmed that his firm had received the LOI, but said it did not put any financial burden on the exchequer. “We received the letter after three months of filing application that otherwise should have been issued to us within one week,” he added.
To a question about the acting CEO’s alleged violation of Act and rules, Tarin, who is also a senior leader of PTI, said his firm was not responsible for any action of the AEDB management.
Published in The Express Tribune, July 24th, 2013.