Transparency International Pakistan has estimated that award of two rental power projects has resulted in a loss of Rs 32.7 billion to the national exchequer, which needs to be recovered from them.
Transparency International Pakistan Adviser Syed Adil Gilani in a letter sent to Chief Justice Iftikhar Muhammad Chaudhry on November 30 has invited his attention that the two rental power projects--GE Energy Rentals 150 mw, and Alstom Power Rentals 130 mw--awarded by previous government in 2006 were unsolicited and in contravention to Public Procurement Regulatory Authority (PPRA) Ordinance 2002 and Public Procurement Rules (PPR), 2004.
"It has been reported that these two projects were approved by ECC to be awarded within 34 days on August 16, 2006, for 3 years period. According to PPRA Ordinance 2002 and Public Procurement Rules, 2004, since PP Rule Nos. 7, 12 (2), 47, and 49 were violated, both contracts amount to mis-procurement under Rule No 50 which is quoted below":
50 Mis-procurement: Any unauthorised breach of these rules shall amount to mis-procurement. It is also reported that Ministry of Water & Power has not provided copies of the two contracts, along with the Contract Evaluation Form to NAB, and therefore has violated NAB Ordinance 1999, Section 33 B.
Adil said: "The country has suffered loss of hundreds of billions of rupees due to these two unsolicited projects, which is the basis of further RPP Projects awarded by the present government, and that too on better terms, ie for 5 year period instead of 3 year period.
He said that it has been reported in the press, and also in the ADB Report of January 2010, item No 57, that these plants were and remained idle most of the time due to non-availability of gas, and are being paid rental charges for the last 60 months at $6 million per month. He quoted an extract from ADB report as under:
"Utilisation of the GE and Alstom plants has been low due to unavailability of gas. These plants were to get that had been reserved for the combined cycle IPP which were in the pipeline. The rental period was supposed to tie in with the IPP installation schedule. The contracts for the GE plant ends on February 22, 2010 whereas that of Alstrom plant ends on June 23, 2010. $6 million a month of rental payments have been paid for these idle plants." Adil in his letter has also brought the following facts to the knowledge of the Supreme Court:
1. That though these plants remained ideal in most of the 36 months contacted period;
2. Were paid under an illegal contact $216 million as rent,
3. Even after knowing that gas is not available, the period of two RPP contracts, which ended in August 2009 has been extended by the Ministry of Water & Power under the present government.
4. Still they are being paid $6 million per month without producing electricity, and $156 million has been doled out so far, after August 2009. Transparency International Pakistan has, therefore, requested the Supreme Court to take notice of the violation in the award of these two Projects in 2006, and recovery of $372 million (Rs 32.7 billion) loss of exchequer money.
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