Questioning the award of the contracts for rental power projects (RPPs) in absence of a concrete policy, the Supreme Court on Friday regretted that the Water and Power Ministry was getting less than 100 megawatts of electricity after paying Rs 20 billion to rental power companies.
A two-member Supreme Court bench of Chief Justice Iftikhar Muhammad Chaudhry and Justice Khilji Arif Hussain was hearing a suo motu case coupled with two identical petitions filed by Minister for Housing and Works Faisal Saleh Hayat and PML-N MNA Khawaja Asif alleging corruption of billion of rupees in RPP contracts.
During the hearing, the chief justice observed that the court was surprised how the Water and Power Ministry awarded the contracts to rental power companies without having any concrete policy.
In his arguments, Khawaja Tariq Rahim, counsel for Water and Power Ministry and Pakistan Electric Power Company (PEPCO), submitted that a summary on RPPs was sent to the federal cabinet, which became a policy after being approved by the cabinet.
The chief justice asked if the ministry had given 14 percent instead of seven percent as mobilisation advance to rental power companies. He said the ministry calculated the rent of rental power plants for the next five years and did not realise what would happen if they could not produce electricity or not fulfil the requirements mentioned in the contract. “It seems whether they give production or not, they will get the rent for their equipment,” the chief justice noted.
Rahim said the case was not like that, adding that if these RPPs did not fulfil the requirement, they would have to pay 1.5 times in penalty to the ministry. The chief justice then observed that neither the petitioners nor the ministry were able to show the court the policy under which the RPP contracts were awarded.
He said Reshma Rental Power plant was producing nothing but was getting enough money. The lawyer submitted that Reshma power plant would return Rs 3 billion to the ministry.
PML-N MNA Khawaja Asif submitted that according to present figures, Karkay Rental Power plant was producing 71MW of promised 231MW, Gulf was producing 68MW, while Naudero was producing nothing as its machinery was dysfunctional.
The chief justice observed that it meant they were getting less than 100MW in total.
Rahim submitted that RPPs were giving services and if they did not provide the same, they would have to pay penalty.
Justice Khilji Arif Hussain said how could the government ask for penalty if it could not provide the companies gas or oil.
Before adjournment, the court asked NEPRA how could it determine reference price without seeing the machinery and equipment.
