RPPs: Another mega scam

12/15/12 11:27 PM

RPPs: Another mega scam

The apex court after investigating about the rental power plants (RPPs) for three years following a complaint of corruption from PML-Q Minister Faisal Saleh Hayat and Pakistan Muslim League-Nawaz MNA Khawaja Muhammad Asif ultimately decided Friday. Before filing complaint and requesting the Supreme Court for Suo Moto action Makhdoom Syed Faisal Saleh Hayat raised the issue of corruption in the award of RPPs before every forum, including the National Assembly of Pakistan, but there was nobody to heard his voice, therefore, he had approached the Supreme Court for initiating suo motu proceedings against all those who were involved in this massive scam of US$ 5 billion, which was being skimmed from the pockets of innocent people of this country. The two-member bench comprising of Chief justice Iftikhar Muhammad Chaudhry and Justice Khilji Arif Hussain, heard the case. In a hard-hitting verdict, the apex court declared all rental power projects (RPPs) deals non-transparent, illegal and void ab initio. As the Supreme Court has found out, the government was lax in overseeing the rental power projects, simply because the kickbacks being received were so lucrative. The court said massive embezzlement was found in the affairs of Sharaqpur Power Plant, Reshma Rental Generation Company Limited, Karkey Rental Power Plant and Gulf Rental Power Project. The Court directed the NAB to proceed against all public
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functionaries involved, including the ministers for water and power, a close aide of President Asif Ali Zardari, during whose tenure the RPPs were approved or set up, and the minister and finance secretary holding charge when down payment for RPPs was increased from 7% to 14%. Zardaris aide Raja Parvez Ashraf was Power Minister when contracts were signed for several rental power projects Since there were a lot of complaints of corruption in awarding contracts of RPPs against all concerned, individually and collectively, therefore, Ministry of Finance went for 3rd Party Evaluation/Audit and to achieve the object, ADB was appointed to do the needful. Asian Development Bank, after receipt of report of the commission formed by it, had told the government that the rental power project was not cost-efficient at all, and that if it was insistent on going through with it, then the project should be significantly scaled down. Of the 19 RPP deals signed initially, only nine were allowed to function after a damning Asian Development Bank evaluation report. Subsequently, six of those nine RPPs were discontinued. They have returned the advance payments in pursuance of orders passed by this court, the judgment said. The auditor general of Pakistan also recommended canceling most contracts since power companies had not followed through on their promises to make the plants operational. The ADB report further reveals that enhancement of down payment from 7% to 14% could not be allowed without inviting fresh biddings and changing the terms of the contract with a view to ensuring fair competition amongst the bidders.
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RPPs: Another mega scam

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According to Supreme Court verdict, the Ministry of Finance, WAPDA, PEPCO as well as GENCOs are responsible for causing huge losses to the public exchequer, which run into billions of rupees by making 7% to 14% down payments to, and purchasing electricity on higher rates, from RPPs, therefore, steps are required to be taken to effect recovery of the amounts with mark up outstanding against the RPPs whose contracts have been signed off or who had failed to achieve COD within the stipulated time in terms of the performance guarantees. Companies bidding for the projects were assessed not on their capabilities or track records, but on their ability to influence government officials. The Supreme Court cancelled all the nine contracts of Rental Power Projects (RPPs). Chief Justice Iftikhar Muhammad Chaudhry said the contracts were in contravention of law, which, besides suffering from other irregularities, violated the principle of transparency and fair and open competition. The verdict said the Finance ministry; Wapda and Gencos were responsible for causing huge losses to the public exchequer which ran into billions of rupees by making seven to 14 per cent down payment and purchasing electricity at higher rates from RPPs. PPP government had destroyed Railways, PIA, NICL, ZTBL and Pakistan Steel Mills and its leaders were involved in corruption of billions of rupees: their cases are already before the Supreme Court. The Supreme Court has made yet another attempt to block the floodgates of corruption by this government, Khwaja Asif, one of the petitioners said after anhttp://pakobserver.net/201204/04/detailnews.asp?id=148412 Page 3 of 6

RPPs: Another mega scam

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nouncement of the verdict. Khwaja Asif alleged Prime Minister Yousuf Raza Gilani was directly responsible for the crime because the projects had been approved by the ECC meeting chaired by him. Supreme Court is trying to clean up public life by stemming chronic corruption in Pakistan and has once again come to aid of the helpless people by announcing a pro-public and historic decision about one the most pressing problems of this beleaguered nation energy crisis brought about by worst kind of corruption in power sector. . According to Supreme Court rental power projects had proved a total failure for failing to overcome chronic electricity shortages. The court observed that the RPP policy was not defined on the basis of transparency and that the money should be recovered with outstanding mark-up. Similarly, all functionaries of Pepco, Gencos, and Nepra, along with sponsors who derived financial benefits from RPP contracts are, prima facie, involved in corruption and corrupt practices, the court said in its ruling. They are, therefore, liable both for civil and criminal action. Due to energy crises the Chief Minister Punjab has recently held President Asif Ali Zardari responsible for the decline of Pakistan and alleged that conspiracies were being hatched against the Punjab, which was facing the worst energy crisis. The province is facing severe unemployment and workers are starving. We respect Shaheed Benazir Bhutto, but oppose the gang of Ali Baba and 40 Chor that formed the government after her tragic death. They have already usurped billions of rupees under the cover of the Benazir Income Support Program. Due to
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criminal negligence of the PPP government, the whole country has been plunged in darkness and the national economy has reached the verge of disaster. The court directed the government to improve the existing system of generation and transmission of electricity, instead, since the country has sufficient installed capacity which is not utilized due to bad governance and circular debt. In the 90-page judgment, authored by the chief justice, the court observed that prior to the introduction of RPPs, the electricity generation system had sufficient potential to produce more electricity, but instead of taking curative steps billions of rupees were spent on Bhikki and Sharaqpur RPPs, which proved complete failure because the object could not be achieved as the shortage of electricity persistently continued, and yet more RPPs were installed. Political elite in Pakistan is least interested in making decisions favoring publics interest and all they care about is their kickbacks in terms of making the contracts as Supreme Court came across a number of irregularities discussed in its Verdict. The greed for many and commissions worth billions of rupees blinded the eyes of those in power. The plan was simple, first to maximize loads-shedding and then to portray RPPs as a solution to load-shedding, sign contracts, get the commissions and later leave the public to face horrible consequences in shape of unprecedented high cost of the electricity with a hope no one will
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remember the fraud after a few years. But this time electronic and print media has highlighted the corrupt hands and Supreme Court has taken matters into its own hands. This should be a wakeup call for the public and they should emphasize and pressurize Governments in future not to let them make decisions which are against the public interest. It is a sad fact and reality that honest and trustworthy people can never hold high positions. No one will appoint them to high position, and no one will elect them either. Only reason is that an honest person has no friends except those who are as honest as they are, and the honest ones are very few. The people have the tendency to complain when things go wrong, but they are at fault too. Presently the country lacks true and honest political leadership. Now people are fed up with the current dispensation over bad governance and corruption elected by them. The RPPs scam is, of course, just the latest one in the long list of our civilian dictator governments crusades against the poor people it is meant to serve and protect. After coming verdict of Supreme Court, the Government should feel ashamed whereas fresh elections are the only solution to the current socioeconomic crisis in the country. It is imperative the people should elect sincere and honest representatives in next elections.

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