Rs 2.25 billion deposited with Supreme Court: RPP contractors liable to pay huge fine: TI Pakistan

M/s. Transparency International Pakistan has calculated that the Rental Power Project contractors who have deposited Rs 2.25 billion with the Supreme Court of Pakistan are liable to pay 10 times fine on this amount, which comes to Rs 22.50 billion, to be imposed under Public Procurement Rules 2004, Rule No 7 of "Integrity Pact." It has also demanded blacklisting of suppliers and contractors.
The two firms who had violated rules and conditions of contract, by obtaining 14% advance payments on the same plant on two different projects had deposited Rs 2.25 billion under Supreme Court of Pakistan orders of December 7th. Chairman, Transparency International Pakistan, Syed Adil Gilani in a letter sent to the Chief Justice of Pakistan, Justice Iftikhar Muhammad Chaudhry that the court examine the act of contractor under PPR Rule No 2(f) given below:
" Corrupt and fraudulent practices" includes the offering, giving, receiving or soliciting of any thing of value to influence the action of a public official or the supplier or contractor in the procurement process or in contract execution to the detriment of the procuring agencies; or misrepresentation of facts in order to influence a procurement process or the execution of a contract, collusive practices among bidders (prior to or after bid submission) designed to establish bid prices at artificial, non-competitive levels and to deprive the procuring agencies of the benefits of free and open competition and any request for, or solicitation of anything of value by any public official in the course of the exercise of his duty.
Adil Gilani congratulated the Supreme Court of Pakistan for taking notice of the mega cases of procurement irregularities and continuation of "your revolutionary policy of zero tolerance against corruption, and the latest being RPP Human Right Case," over a Transparency International report which had alleged corruption in rental power projects.
He further said: if the act is determined by the court as 'corrupt and fraudulent practice', he requested the court to invoke PPR Rule 2004, Rule No 7 of Integrity Pact and impose 10 times mandatory fine on the contractors, which may cause a recovery of Rs 22.50 billion to the exchequer as per commitment given by the bidders/contractors and also to examine taking action under Rule No 19 - blacklisting of suppliers and contractors.
The Rule lays down that: Not withstanding any rights and remedies exercised by Government of Pakistan in this regard, (name of supplier) agrees to indemnify Government of Pakistan for any loss or damage incurred by it on account of its corrupt business practices and further pay compensation to Government of Pakistan in an amount equivalent to 10 times the sum of any commission, gratification, bribe, finder's fee or kickback given by (name of supplier) as aforesaid for the purpose of obtaining or inducting the procurement of any contract, right, interest, privilege or other obligation or benefit in whatsoever form from Government of Pakistan.
Another issue the Chairman, Transparency International Pakistan requested the Court to examine related to reports that FIA has booked Iqbal Z. Ahmed, a tycoon in energy sector, who is allegedly involved in transferring Rs 1.7 billion abroad in the name of Iqbal Afridi, his close associate, and others. Iqbal Z. Ahmed has invested in Rental Power Plants (RPPs) and deals in Liquefied Petroleum Gas (LPG) business.
According to record maintained by Transparency International Pakistan, President of Walters Power International (WPI), had said in Oklahoma City in December last year that funding is completed for US $52 million natural gas-fired 51 Megawatts power plant in Naudero, Pakistan.
Walters, a former Oklahoma Governor, said contracts were finalised at recent meeting in London and his company issued notice to proceed on the plant. "A team from Tulsa-based ProEnergy EPC Services is on ground in Pakistan, organising local subcontracting necessary to build plant."Rolls Royce turbines are on way to Pakistan, where they will generate power for 51 MW plant.
Iqbal Z.Ahmed, a partner in Pakistan Power Resources LLC along with Walters said ProEnergy Services would build two power plants, with EDG Engineers of Tulsa supplying engineering services. "There is tremendous demand for power in Pakistan. Entire regions are undeserved and lack of regular, dependable power is detrimental to its economy."
David Whisenhunt, President of ProEnergy EPC Services, said his company is doing design engineering, procurement of equipment, material and supervise construction of three power plants in Pakistan. "We've started shipping equipment there," he said of Naudero project. "We'll kicking that project off probably in next week to 10 days."
A second project is under development in Guddu, Pakistan. He said it is expected to cost about US $70 million and produce 110 MW. "It involves gas turbines we purchased and refurbished from US and China." Guddu project, like Naudero plant, is getting underway now. Our schedule is to have Naudero online in about 150 days. Guddu is about on that same type schedule."
Walters Power & Pakistan Power previously developed 136 MW power project in Bhikhi, is also developing 205 MW rental power project in Korangi, Karachi and 192 MW project in Multan. They recently participated in purchase of stock for a new independent power project near Karachi that will produce 133 MW. ProEnergy is also involved in Korangi project, which Whisenhunt said should cost about USD 100 million once it is completed. It will be two gas-turbine generators, about 100 MW. Korangi project may get underway within next three months, if not sooner.