Corruption allegations: govt to display RPPs contracts on Pepco website

[Naveed Yaseen]

MUSHTAQ GHUMMAN
ISLAMABAD (September 26 2009): The government has decided to display rental service contracts and other related documents on Pakistan Electric Power Company's (Pepco) website, in response to allegations of corruption and nepotism against key government functionaries, who directly dealt with the rental power plants (RPPs), well-informed sources in the Ministry of Water and Power revealed to Business Recorder on Friday.

In May 2009, some Pepco officials admitted before the representatives of international financial institutions that the recent power crisis compelled the entity to install the most inefficient and expensive RPPs. However, later on, the Pepco distanced itself from these remarks.

The main controversy revolves around the applicability of 14 per cent mobilisation advance and deferment of six percent withholding tax at the post-tender stage, as these conditions were not noted at the pre-tender stage. Rules disallow the government to change conditions after the pre-tender stage in an attempt to preempt charges of corruption and nepotism.

According to the Wapda's wing, WPPO, rental power proposals were invited by the Pepco through international competitive bidding (ICB) process. Letters of award were issued after review of rental power proposals by the evaluation and scrutiny committee to the lowest bidders. Subsequently, rental service contracts were signed with the concerned Gencos.

To dispel any lingering suspicions on RPPs deals, rental services contracts and relevant documents were being displayed on the Pepco' website, said one of the officials of Wapda, in a letter to the RPPs, a copy of which was also sent to Water and Power Secretary Shahid Rafi. According to the Public Procurement Rules 2004, all the contracts exceeding rupees five million are to be posted at the website of Public Procurement Regulatory Authority (PRRA).

The sources said though Prime Minister Syed Yousuf Raza Gilani had approved installation of the RPPs with a total capacity of 2250 MW, the Finance Ministry had neither paid a mobilisation advance to most of the RPPs nor had it finalised a mechanism to arrange 3.15 billion dollars to be paid for the projects.

According to official documents, lump sum contract price of 248.95 MW Karkey rental projects is 564.64 million dollars; of 230 MW Walters rental project, the price is 325.893 million dollars; 81 MW Gulf rental project would cost 85 million dollars; 221 MW independent power rental project has an estimated cost of 423.212 million dollars; 220 MW Reshma power rental project will cost 394.778 million dollars; 170 MW Ruba energy rental project: 305. 669 million dollars; 85 MW Sialkot rental power project has a price tag of 112 million dollars; 150 MW Sumandari Road, Faisalabad, will cost 135 million dollars; 110 MW TPS Guddu has a price of 72 million dollars; 150 MW Sahuwala Sialkot to cost 165 million dollars; 192 MW TPS Multan to cost 208 million dollars; 220 MW Satian Road, Faisalabad, has a price tag of 111 million dollars; 200 MW Ludewala (Sargodha) to cost 151 million dollars; and 51 MW Naudero to cost 91.7 million dollars.

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