National Accountability Bureau (NAB) has, reportedly, started making arrests in Rental Power Plants (RPPs) cases after reaching a conclusion that the contracts were not transparent, well informed sources told Business Recorder. On March 30, 2012, Supreme Court ruled that RPP contracts were non-transparent and ordered that these be rescinded.
The first causality is said to be Rana Muhammad Amjad, General Manager, Wapda Private Power Organisation (WPPO) who, according to NAB, was involved in this scam. Rana, sources said, was about to leave for the UK to attend his son''s marriage ceremony, but he was arrested by the NAB before he could have ''fled''.
The apex court had also directed NAB chairman Admiral Fasih Bokhari (retired) to proceed with corruption references against those who were at the helm of affairs when the contracts were signed between 2006 and 2008 to overcome a widening energy shortfall through RPPs as a stopgap arrangement. The Supreme Court verdict held that all RPP contracts - solicited and unsolicited signed off or operational, right from 220MW Bhikki Sheikhupura and 136MW Sharaqpur up to Piranghaib and Naudero-I and II - were entered into in contravention of PPRA rules. Besides suffering from other irregularities, the contracts also violated the principle of transparency and fair and open competition. The NAB has finalised a list of the wanted accused in RPPs case but is refusing to release their names, said a source in the Ministry of Water and Power.
"Proof that Rana played a key role in the award of contracts has been found. Other people will also be arrested as we find court-worthy evidence," an official spokesman for NAB told Business Recorder. An insider told this scribe that a senior official of NTDC, former and incumbent officials of Private Power and Infrastructure Board (PPIB) and Pepco and a couple of former Secretaries of Water and Power are expected to be taken into custody.
Liaquat Jatoi and Raja Pervez Ashraf have been questioned. During their tenures, down payment to different RPPs was raised from seven to 14 percent. The Supreme Court judgement says: "Similarly, the functionaries of Pepco, Gencos, Pakistan Power Infrastructure Board (PPIB) and National Electric Power Regulatory Authority (Nepra), along with sponsors (successful bidders) who derived financial benefits from the RPP contracts, are prima facie involved in corruption and corrupt practices. Therefore, they are also liable for both civil and criminal action".
The NAB chairman was asked to submit fortnightly reports on progress on the matter to the court registrar, to be seen by judges in their chambers. The judgement also scolded Nepra and said that in terms of the Constitution and Power Act of 1997 it had been mandated to safeguard interests of consumers, but it failed to perform its duty diligently. "It is a constitutional requirement that every action of the government authorities should be aimed at socio-economic development of the country."
Accepting an earlier report of the Asian Development Bank (ADB), the court regretted that nine of the 19 RPPs were allowed to operate. Subsequently, six of the nine RPPs were discontinued either having been signed off or having failed to achieve the COD (commercial operation date) target. The remaining RPPs - Karkey, Naudero-I and Gulf Power Plant - are functioning, but they are producing electricity significantly lower than their generation capacity, except Gulf Power which is producing electricity close to the agreed capacity.