FRIDAY OCTOBER 28: Generation capacity of RPPs: Supreme Court asks Pepco to provide details

ISLAMABAD: The Supreme Court (SC) on Thursday sought details pertaining to electricity generation capacity of Rental Power Projects (RPPs) during the last 60 days from Pepco. The apex court also issued directives to the government to submit details of payments made so far to power projects and per unit cost of electricity for consumers in the country.
A two-member bench of Chief Justice Iftikhar Muhammad Chaudhry and Justice Khilji Arif Hussain has been hearing suo motu case on the RRPs contract award and a petition titled Khawaja Muhammad Asif versus Federation of Pakistan, etc. During the second day of hearing, Syed Faisal Saleh Hayat, Federal Minister for Housing and Works, resumed his arguments and apprised the bench that RPP contracts were awarded by violating Nepra rules.
He told the bench that according to Nepra rules, machines that are more than 10-year old or those machines that have been in operation for 60,000 hours would not be used for generation in Pakistan. However, he added, a number of rental power plants were older than 25 years. Hayat contended that Iqbal Z Ahmed owned RPP General Electric in 2007 but he was unable to generate a single unit. However, he was "blessed" with as many as five more RPPs during 2009. He further alleged that criminal negligence was shown during the award of contracts that caused substantial loss to exchequer.
While addressing Hayat, the CJP asked whether there was anybody in the regime to raise voice and object to corruption in RPPs, Faisal pointed out that the then Finance Minister Shaukat Tarin did object to the policy of RPPs by declaring it unfeasible. Hayat added that he himself had submitted half a dozen adjournment motions in National Assembly (NA) but the Speaker NA rejected all the motions. He added that parliamentarians moved the SC for a remedy in case after the issues could not be settled in the House.
He further pleaded that Independent Power Producers (IPP) projects reflected investment in Pakistan whereas RPPs were on rent for five years. He alleged that Ministry of Water and Power misguided the Federal cabinet and provided inaccurate details and facts which led to incorrect analyses and no research work was conducted in this connection.
Hayat informed the bench that according to Asian Development Bank, the third party evaluator, RPPs are for short-term and are considered a temporary arrangement all over the world. On the occasion, Faisal informed the bench that Karkey generated only 62 MW electricity per day while the government is paying for optimum generation capacity. It paid Rs 23 billion to this RPP during last year. He added that the situation has improved during the current year as average production recorded was between 110MW and 120MW.
While giving details of per unit cost, Faisal said that the cost of each unit of electricity produced by RPPs was US 3.7 cents while Karkey's was US 5.38 cents. Pakistan Muslim League (N) leader Khawaja Asif informed the bench that electricity generated by as many as eight RPPs on Thursday October 27, 2011 was as follows: Karkey 51MW, Naudero-I 21MW, Gulf 52MW and Reshma Power Plant 30MW.
Hayat said that government transferred a Secretary of Ministry of Water and Power for disclosing lacunae in RPPs. The CJP termed transfer or suspension of a dutiful officer an act against the norms of good governance, adding that such practices are against the spirit of the Constitution.
The Chief Justice noted that there is no news about Karkey-II, adding that even average capacity of power generation has not been obtained from the RPPs. He said the SC was considering an expert for physical inspection of the sites and the machinery of RPPs. The day-long hearing was adjourned till Friday (today).