Majority of the Rental Power Plants (RPPs) agreements have already been scrapped by the defunct Pakistan Electric Power Company (Pepco) besides imposing heavy penalties on contractors for their failure to meet the contractual obligations, said Pepco sources.
According to the reliable defunct Pepco sources, majority of the eight RPPs, recommended by the ADB audit report, have been signed off after failing to meet contractual obligations. According to them, former Managing Director Pepco Tahir Basharat Cheema had scrapped majority of the agreements one after the another on their default to meet agreement clauses.
It may be noted that the Chief Justice of Pakistan Justice Iftikhar Muhamamd Chaudhry is hearing a case on alleged corruption in RPPs. Former Interior Minister Faisal Saleh Hayat has alleged that maximum electricity shortfall is carried out to justify the installation of RPPs.
Earlier, ADB audit report June 2010 had highlighted many loopholes in the shabby deals, termed the contracts in favour of the sellers and highlighted constant financial constraints on the already limited resources as the government is likely to pay approximately $5 billion (Rs 430 billion) in rent in five years.
Former Finance Minister, Shaukat Tarin was also against the RPPs, having developed serious differences with the government on the issue. Pepco sources said the some people with vested interest have spread a completely false impression on government's guarantee to cover the rental sponsor's event of default. They said there is no such arrangement and the entire risk is assumed by the rental sponsors in the event of default. Sources said the Pepco lawyer is on strong footing to defend the government on corruption charges.
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