February 4, 2003	Tuesday	Zul Hijjah 2,1423

Please Visit our Sponsor (Ads open in separate window).

ISLAMABAD, Feb 3: The Pakistan People’s Party on Monday alleged that the contract of an independent power project (IPP) had been violated and demanded an inquiry into the affair.

In a statement, party spokesman Farhatullah Babar said: “The PPP demands a thorough probe into how the state has been deprived of several hundred million dollars by gifting away an IPP to a foreign investor.

“The IPP, Rousch Power Limited, located near Multan, came online and begun producing power in 2001. Under the terms of agreement with the government, the plant was to run on furnace oil.

“Soon after commissioning, however, Rousch ran into financial trouble and began incurring huge losses duly certified by the chartered accountants of the company,” he said

He said the chartered accountants had revealed in their latest report that “during the 18 months of commercial operation the company has incurred accumulated losses of Rs2,854 million and future operations are not sustainable.”

He said: “The company was thus on the brink of liquidation and had to wind up.

“What the government should have done at this point of time is to invoke sub-article (vi) of the contract with the IPPs, which says that if a project incurred cumulative operating losses, the government would take over and run the plant itself without compensation to the shareholders.

“By taking over the power plant at that point and converting it from furnace oil to gas itself the government could have brought to the national kitty windfall gains of several hundred million dollars.

The benefits of such windfall gains could have been passed to the power consumers, who are hit almost daily by hike in power rates.

“However, for some unexplained reasons, the finance ministry closed its eyes to the takeover option.

“Instead it quietly allowed Rousch power project to switch to gas and guaranteed it huge quantities of cheap gas, enabling the company to make an easy fortune — all at the expense of the poor people of Pakistan.

“Huge quantities of cheap gas produced in the country have thus been granted to a private company only to benefit it in violation of the original terms of contract, which required that the plant would be run on furnace oil,” he alleged.

The PPP asked why the finance ministry had not exercised the takeover option and who the local agent for the company was.

The Pakistan People’s Party spokesman also asked if the cheap gas being supplied to the plant at public expense was at the root of the complaints of the Baluch leaders that their gas wealth was being stolen for the benefit of others.

He asked the National Accountability Bureau to take notice of the issue.