The Supreme Court on Friday questioned why the feasibility report of Rental Power Projects (RPPs) was prepared in a non-professional manner. A two-member bench comprising Chief Justice Iftikhar Muhammad Chaudhry and Justice Khilji Arif Hussain has been hearing suo motu case clubbed with identical petitions, alleging corruption in award of contracts for RPPs.
During the course of hearing, Pepco''s counsel Khawaja Tariq Rahim, petitioners Khawaja Asif, Federal Minister for Housing and Works Faisal Saleh Hayat, former Federal Minister for Water and Power Raja Pervez Ashraf and National Electric Power Regulatory Authority (Nepra) counsel Najam-ul-Hassan Kazmi were among those present in the court.
The bench observed that out of 19 RPPs only four plants were operational, generating 112.41 MW electricity. According to the court, national grid system is receiving less than the pledged supply from RPPs, although billion of rupees were spent on these arrangements.
During the course of hearing, the bench inquired from Khawaja Tariq Rahim about the policy under which the RPPs contracts were awarded. Moreover, the SC asked Kazmi to explain how the electricity tariff was determined without the required examination and evaluation of RPPs'' machinery. The bench repeated that no explicit policy to tackle the prevailing electricity situation in the country was presented by Wapda and Pepco before the court.
Khawaja Tariq Rahim contended that under Rules of Business (Part-D) Federal Cabinet approved RPPs contracts, adding that the Ministry of Finance and banks declined to pay 7 to 14 per cent mobilisation advance to projects. Therefore, the matter was referred to the Cabinet. Rahim said: "Cabinet decision would become policy under Rules of Business so the RPPs approval [by the Cabinet] is nothing but a policy for the RPPs".
The bench asked to why the government was not supplying oil to the RPPs, adding that what was the policy in relation to payment of rent to projects in operational and non-operational situations. Rahim told the bench that the government was buying RPPs'' services as electricity and in case of failure in the delivery of services they were (the RPPs) bound to pay penalties.
The counsel prayed for more time, arguing that the ''other party'' in the case had cited before the bench some "specific" parts of the Asian Development Bank report that related to the RPPs while he would present the report without any "colourful" interpretation.
On this occasion, the CJP inquired from NEPRA counsel Najam-ul-Hassan Kazmi about the law under which mobilisation of advance from 7 to 14 per cent was given to RPPs on the basis of reference tariff for the purpose of calculating rent. The CJP also inquired about its trickle down effect. He further asked how RPPs'' contracts could be awarded without the inspection of plant''s machinery on the site. Kazmi apprised the bench that after the approval of bidding, NEPRA determined tariff based on actual cost of the project. The court adjourned the hearing till November 14.
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