Ministry of Water and Power is reportedly unwilling to comply with the federal cabinet''s decision to remove inconsistencies in contracts of six Rental Power Plants (RPPs). In a summary submitted by the Ministry of Water and Power to the federal cabinet in its last meeting held on September 22, 2010, the Ministry noted that compliance with the cabinet''s decision taken nine months ago was not possible.
On January 27, 2010, federal cabinet, in its meeting discussed the Asian Development Bank''s (ADB) audit report on RPPs in detail and endorsed its conclusions and recommendations. One of the recommendations was that the six identified RPPs (838MW), not yet effective, be reviewed in legal terms before taking any further action. It was also decided that inconsistencies in contracts must be removed.
After the lapse of nine months, the Ministry, in its summary stated that are RPPS are under review but stated, at the same time, that inconsistencies could not be removed, adding that it is simply not realistic to reopen the signed agreements in order to remove inconsistencies without hampering/delaying the projects at various stages of implementation. The cabinet also decided that commercial operations tests should be witnessed and certified by an internationally acceptable independent engineer.
The Ministry, in its reply, tabled before the cabinet on September 22, 2010, presided over by the Prime Minister, Syed Yousuf Raza Gilani, stated that concerned Generation Companies (Gencos) have been advised to appoint independent engineers for the relevant projects. According to the Ministry, Terms of Reference (ToR) for appointment of independent engineers have been issued.
The elimination of 100 percent load shedding during peak demand period was considered not a viable option from affordability perspective, and the Ministry said that load shedding will continue even with the induction of all upcoming plants/projects, adding that there is a need to air this information to the general public in advance. However, a meeting was suggested to be held on the issue.
In light of ADB audit report, the cabinet had also directed that integrated analysis for optimum use of available gas and new sources of energy should be aggressively pursued for affordable power. Ministry, in its reply clarified that necessary steps are recommended for optimum use of available gas and to provide affordable power. General Manager, Thermal, Pakistan Electric Power Company (Pepco) has submitted a working paper to the Ministry in this context.
However, when contacted the official spokesman stated that it is restricted information and the media should approach the Cabinet Division for confirmation with respect to the RPPs as the Cabinet Division is the custodian of cabinet related official decisions made in public interest.
The sources said Secretary Water and Power, Shahid Rafi, gave a detailed briefing to the federal cabinet and faced tough queries with regard to non-implementation of cabinet''s decision in letter and spirit. Unconfirmed reports suggest that Pepco is being pressurised to ''accept'' at least four RPPs of influential sponsors. It has been alleged that the committee headed by Additional Secretary Water and Power, Ehsan Malik, was compelled to sign the report prepared by the former Managing Director, PPIB, Fayyaz Elahi.