783 MW rental power contracts given to corruption convicted friends of Zardari

[Naveed Yaseen]

By Rauf Klasra

ISLAMABAD: It can only happen in Pakistan that an indicted felon can go horse-riding with the top political leadership, then walk away with lucrative multimillion dollar state contracts in partnership with one who himself earned freedom through a plea bargain with the NAB.

The former governor of Oklahoma (USA), David Walters, is indeed an extremely resourceful man. As reported by Michael D Bates in the Urban Tulsa Weekly (Sept 3, 2008), “Political observers thought David Walters’ political career was finished when he departed Oklahoma’s Governor’s Mansion in 1995 after a single term and an indictment on eight felony counts.

“Accusations that Walters had promised state jobs in exchange for campaign contributions began early in his term as governor. In October 1993, Walters was indicted by a multi-county grand jury on six felony perjury counts, two felony conspiracy counts, and a misdemeanour count of accepting an excessive campaign contribution. Prosecutors dropped the felony charges in exchange for a guilty plea on the misdemeanour”.

The man who received an indictment in his own country however received riding tips in 1995, from none other than Mr Asif Ali Zardari. And now, almost fourteen years later, the gentleman has bagged extremely lucrative contracts for providing 783 MW of rental power.

Besides enjoying the obvious blessings of the top officials of the country, Mr Walters has none other than the energy czar of Pakistan, I Z Ahmed as his business partner. Mr Ahmed it may be recalled was also touted as being extremely close to the former president, Pervez Musharraf.

Mr Walters confirmed to The News from USA, in writing, that President Asif Zardari was known to him since 1995 when he (AZ) had taken him for a horse ride. “I had the privilege of meeting President Zardari in Islamabad on my last visit to Islamabad last month and reminded him that the last time we had met was when he had invited me and my colleague to join him for horseback riding in 1995. Mr David also recalled that seeing me struggle with the horse, Mr Zardari had said: “I take it riding is not your passion.”

Mr David also confirmed that he had also met Power Minister Raja Pervaiz Ashraf and his staff on this last visit for a frank discussion on the challenges being faced by our company and others in executing these power projects. But, he also strongly defended his position against the conviction by saying these cases were politically motivated and later dropped.

Governor of State of Oklahoma between 1991 to 1995. Mr Walters, a Democrat, had pleaded guilty and as a result of his pleading guilty to a misdemeanour violation, six perjury charges and two conspiracy counts were dropped and David Walters who received one year deferred prison term, was also fined and made to contribute US$135,000 from his campaign fund to State’s Ethics Commission as part of the Court Order.

Apparently, the past ethical and legal record of the former governor is of no consequence to authorities here as out of the total contracts for production of 2,200 MW power through rental power plants, surprisingly, 783 MW contracts have been given to the company jointly owned by Mr Walter and Pakistani energy tycoon Iqbal Z Ahmed. According to Ministry insiders, Mr Walters is indeed a good partner to have, owing to his resurrection in the Obama led democratic dispensation. Now billions of rupees are being advanced to the company jointly owned by Mr Walters and Iqbal Ahmed, which would be adjusted later in the rental bills.

In an interesting similarity with his business partner’s brush with law, Mr Iqbal Z Ahmed too remained in NAB custody for several months before being bailed out after he paid about Rs300 million as part of a plea bargain. The clout of Mr Iqbal Ahmed, a mutual friend of both PPP leaders and Musharraf, is evident from the fact that he was a part of the secret negotiation team which had met Benazir Bhutto at London in 2007 to strike a deal with General Pervez Musharraf. And this fact has also been reported by Mahmood Shaam in his new political book “Upset 2008” based on interviews with General Pervez Musharraf.

A spokesman of Iqbal Z Ahmed Group confirmed to The News that Mr David Walter is the business partner of Associated Group which secured the multi billion rupee rental power deal. “We appreciate and welcome the financial and technical assistance that Governor Walters brings to our business and our country”, Mr Fasih Iqbal, the son of Iqbal Ahmed said.

Background investigations revealed that this business marriage between these two partners may have been facilitated in 1995 by one of the top officials of Pakistan. It was in 1995 when Mr Walters along with his political friend Donald Smith wanting a slice of business from Pakistan from the then Benazir Bhutto Government came to Pakistan and it was then that he first met Mr Asif Ali Zardari. In fact it was during that trip that Mr Asif Ali Zardari took Mr Walters on horseback riding in the Murree Hills, as also confirmed by Mr Walters himself. It was also during that trip that Mr Walters met Iqbal Z Ahmed of Associated Group.

‘The News’ has learnt that Iqbal Z Ahmed of Associated Group, which also has major LPG interests, has set up a company in Oklahoma USA under the name of Pakistan Power Resources. This company, according to an Oklahoma newspaper Tulsa World, is controlled by Iqbal Z Ahmed’s Group. David Walter’s company Walters International is a minority partner of Pakistan Power Resources. Although the industry sources describe Iqbal Z Ahmed to be the primary beneficiary of the rental power bonanza, 783 MW projects have already been contracted to Iqbal Z Ahmed and David Walters. These include: Naudero 51 MW, Guddu 110 MW, Bhichi 225 MW, Korangi 205 MW, Multan 192 MW.

Interestingly, both Iqbal Z Ahmed and David Walters have had serious allegations and charges against them in Pakistan and United States respectively.

Iqbal Z. Ahmed was arrested by National Accountability Bureau (NAB) in 1999. His name was listed amongst 105 names of NAB who struck plea-bargain deals with the Bureau, to Election Commission of Pakistan (ECP) and the State Bank of Pakistan (SBP), for necessary action as they stood disqualified from contesting elections and seeking loans from financial institutions under the NAB Ordinance. The list included 15 politicians, 50 businessmen and 40 bureaucrats and government servants. According to a NAB officials, the government has recovered billions of rupees from them through plea-bargain and Mr Iqbal was one of them.

Iqbal Z Ahmed’s American partner David Walters has not had a clean past either. David Walters, who is also Chairman of Walters Group, was in Pakistan a couple of weeks ago and held meetings including meeting with Raja Pervaiz Ashraf, Minister for Water and Power. Although in Pakistani media, he was portrayed as the Governor of the State of Oklahoma in describing his meetings with various ministers and officials in the Pakistan Government.

Background investigation revealed that Iqbal Z Ahmed has a knack for ending up in power corridors of every hue, political or otherwise. Not shaken by his arrest and confinement at Sarwar Road, Police Station, Lahore, by General Pervez Musharraf’s NAB, Iqbal got so close to Pervez Musharraf later that he was a regular visitor to Presidency. He would also be invited to attend meetings in the Camp Office of the Musharraf. It was, according to a source, in one of those meetings on March 22, 2006 attended by Prime Minister Shaukat Aziz and President Musharraf that official minutes of the meeting (available with The News) stated the order of the President/Prime Minister for “WAPDA” to finalize terms and conditions for leasing Lakhra Power Plant to Associated Group within one week. The same minutes also ordered that “An appropriate block in Thar Coal Field to be allocated to Associated Group”. Iqbal’s interest and dealings with the NAB led Iqbal to give lucrative LPG quotas not only to several army generals but also handed LPG quota to Ex-NAB Chairman General Khalid Maqbool’s son in law company M/s Synergy Resources, Ex-NAB Chairman General Munir Hafeez’s wife Mrs Humaira Hafeez owned company M/s Wyne Gas also got LPG quota and so did Super Star Gas a company owned by Ex-NAB Senior Official Capt Basharat Ahmed as well as to Sagi Gas a company owned by the son of Col Sadiq, another Senior NAB Official. Iqbal Z Ahmed also had close relative of Musharraf’s Principal Secretary Mohsin Hafeez covered in this quota scheme besides the former Interior Minister General Moeen uddin Haider’s son as well as General Tariq Hameed and General Rehmat Khan. Jehangir Badar’s brother works for the Associated Group.

Reportedly, a group of sitting federal ministers had borrowed the private jet of Mr Iqbal to travel to Lahore to attend the valima ceremony of the son of Prime Minister Gilani at Lahore.

When contacted by The News, Fasih Ahmed did not offer any comment on this aspect of offering LPG quotas favours to top politicians, army generals and civilian officers. Fasih Ahmed of Associated Group confirmed that David Walters was the partner of his father’s company. Mr Fasih confirmed that Pakistan Power Resources LLC (PPR) is incorporated in Oklahoma, and majority-owned by Associated Group and minority-owned by Governor Walters who founded and owns Walters Power International (WPI), also an Oklahoma-incorporated corporation which was founded in 1995. Fasih said Governor Walters’ company is a minority shareholder in Jamshoro Joint Venture Limited (JJVL) on standard terms and conditions allowed under the laws of Pakistan.

He said, the PPR is implementing the gas-fired 110 MW Guddu Power Project and the furnace oil-based 192 MW Multan Power Project, while WPI is implementing the furnace oil-based 205 MW Korangi Power Project and the gas-fired 51 MW Naudero Power Project. WPI has proposed augmenting the Naudero Project to 102 MW to capitalize on economies of scale.

He rejected any irregularity or use of clout to get these lucrative contracts. He said standard terms and conditions that were advised through tender documents to all qualified parties seeking to set up rental power projects were followed. “We follow the rules, we operate in a transparent manner, and we participate in competitive bids. We work hard in the often-challenging arena of developing critically needed projects in Pakistan. We endeavour to do all we can to develop our economy so fewer and fewer of our people will have to struggle to make a basic living” he concluded.

Meanwhile, Mr David Walters told The News from USA that his company WPI was working on the 51 MW Naudero project and the 205 MW Korangi project. “Neither project has, to date, received any mobilization advance. While appreciating your government’s financial limitations, which are not peculiar to Pakistan, you will appreciate that this has raised the risk profile of both projects”, he said.

Mr David confirmed his meeting with Presidents —Musharraf and Zardari. “I had the privilege of meeting your former President Musharraf for the first time in 2005 and then twice in the period 2006-2007. Replying to a question about his conviction, Mr David said as far as my political career was concerned, contrary to the question posed, “I served out my full term as Governor of Oklahoma from 1991-1995. The charges from almost two decades ago that has a reference in your note were politically motivated, baseless and were immediately dropped”.

He said a few years later he was nominated by a statewide vote of the Democratic Party in 2002 for the US Senate and was endorsed by 28 of our local newspapers. “More recently, I was also one of three co-chairmen of the DNC Rules Committee last year when we confirmed Sen Barack Obama as the candidate for President of the US I was accorded the privilege of being the only person from my home state of Oklahoma to speak to the national convention”, he added.

Meanwhile, a spokesman of Water and Power Ministry told The News that all the rental projects were given on merit and after following the set procedures and rules. He said, it was PPP government initiative in the 90s which brought forward the private generation through the IPPs. There emerged a storm of reaction against IPPs then. In fact, the word IPPs became blasphemous, and the media let the nation to believe that all investment in this context would be detrimental to the country. Today after a decade plus, the IPPs have established credibility and have become successful partners to the government in the power generation. The IPPs not only brought billions of dollars but also proved their professional expertise over and above the government system. Today, the Ministry of Water and Power is opening a new chapter of the Rental Power Projects (RPPs). This again is the only choice for the immediate, short-term solution to meet the crises of power shortages. It is, perhaps, only with time that RPPs would fully establish their credentials as partners in power generation with the Government. But then we should not deny them the opportunity to provide the service to the public at their cost. The government has already notified the inauguration schedule for the new power plants, hence anxieties and worries need to be put to rest, the spokesman concluded.

http://www.thenews.com.pk/top_story_detail.asp?Id=24730