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| October 28, 2006 | Saturday | Shawwal 4, 1427 |
PPP seeks probe into leasing of power plants
ISLAMABAD, Oct 27: Pakistan Peoples Party has expressed concern over reports of ‘massive corruption’ in the leasing of old power plants and demanded a parliamentary probe into it.
“The two contracts recently signed for rental power plants stink with corruption and call for a Parliamentary probe,” said PPP spokesman former Senator Farhatullah Babar in a statement here Friday.
He said first no tenders were invited for leasing the power plants. In June Wapda hurriedly floated short tender notice for power plant in Multan but no tenders were invited for the plant in Sheikhupura.
He said second, outrageous financial terms had been offered to the vendors. Instead of paying the lease at the end of the month as stipulated initially the vendors had been offered advance payment for the whole year and also for the security of the plants.
About $115 million would be paid in three years for each of the 150mw second hand power plants whereas a new plant could be obtained for around $60 million.
“As the prices of new power stations are well defined but there is no way to verify pricing of second hand equipment that was why the regime had opted for leasing used power plants.”
He said that according to reports the vendor GE Energy would be paid $3.11 million/month or 3.42 US cents/kwh as capacity charge and an additional US cents of 3.97/kwh as gas fuel charge for the 150mw plant in Sheikhupura. The total tariff works out to be US cent 7.38/kwh for used equipment!
The vendor AE Energy and Alston Rental Power will be paid $3.2 million/month or a capacity charge of US cents 3.52/kwh and 3.74/kwh for the fuel for another 145 mw second hand plant in Bhikki near Sheikhupura. The total tariff ends up at US cents 7.26/kwh, once again, for used equipment.
A 12-month revolving commercial letter of credit $37.32 for GE and $38.4 million for APR has also been provided. A Stand-by Letter of Credit (SBLC) amounting to $111.96 million for GE and $115.2 million for the APR is being provided for the security of the power plant for three years, by the National Bank of Pakistan in New York and confirmed by a foreign bank acceptable to the vendors.
He said that as new IPPs will not come about soon the lease period of both these plants will be extended. For a 10-year lease the government will end up paying $380 million for each plant whereas such a plant does not cost more than $60 million. “This is yet another scandal of monumental proportions that is outrageous and calls for a probe.”
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