Non-achievement of RPPs'' commissioning: Rs 8.3 billion wasted: Auditor General

The Auditor General of Pakistan has said that Rs 8.3 billion were wasted due to non-achievement of commissioning of rental power plants on Commercial Operation Date. According to Auditor General Report-2010-11.
The Economic Co-ordination Committee (ECC) in its decision dated August 21, 2009 had approved the summary submitted on August 17, 2009 wherein additional 7 percent advance payment was allowed to all the remaining potential sponsors with understanding that their rental power plants (RPPs) should be commissioned during the financial year ie 2009-10.
The report says that against the spirit of above decision, another additional 7 percent advance payment was made to all rental power plants, despite the fact that these rental power plants did not achieve their Commercial Operation Date (COD) during the financial year 2009-10. This had defeated the very objective for which second 7 percent advance payment was made. The amount of advance payment of Rs 8.3 billion needs to be recovered besides an interest of Rs 1.08 billion as per prevailing bank rate.
The report says that the matter was taken up with the management in November, 2010 and referred to the Ministry on December 31, 2010. It was also discussed in DAC meeting held on February 8, 2011. The management explained that the progress regarding recovery of advance from non-performer RPPs was as under:
Rs 1.26 billion had been recovered from Young Gen Power Ltd; Rs 1.08 billion had been recovered from Techno Energy (Pvt) Ltd, under Supreme Court''s decision dated February 13, 2010. The report says that default notice had been served to Techno-e-Power (Pvt) Ltd. The matter was sub judice in Islamabad High Court. Notice had also been served to Reshma Power on January 28, 2011 to refund the advance along with interest.
The matter pertaining to all RPPs was also under trial of Supreme Court of Pakistan. The next date of hearing was February 15, 2011. DAC directed the management to provide the record of recovery and expedite the remaining action under contract provisions against the sellers. However, the requisite action was still awaited.