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ISLAMABAD: A representative of the state-run organisation charged with regulating the power sector and an amicus curiae criticised in the Supreme Court on Wednesday the government's initiative of launching rental power projects (RPPs) as a stopgap arrangement for meeting the shortage of electricity.
Through a letter sent to the water and power ministry, the National Electric Power Regulatory Authority (Nepra) had opposed the setting up of the RPPs because it felt that the plants would only add to the burden of the consumers without generating much electricity, Syed Najamul Hassan Kazmi, legal counsel for the Nepra, told the two-judge bench hearing allegations of corruption in the scheme.
The letter had also pointed out that establishing oil-based power plants was not advisable, particularly when the availability of furnace oil was erratic at best, Mr Kazmi told the court. Despite the payment of 14 per cent advance mobilisation funds, the RPPs had failed to ease the electricity shortfall.
Advocate Anwar Kamal, who appeared before the bench as amicus curiae, termed the idea of setting up rental plants a “criminal decision” that not only overburdened the power sector but also resulted in a “huge waste of time and money for the nation”.
The presentation by Mr Kazmi prompted Chief Justice Iftikhar Mohammad Chaudhry to remark that the future generations would hold the present generation accountable for the country's many ills. “Look at Bangladesh, which got independence after us, and North Korea, which borrowed our policies. Look where they are today and where we are,” he said.
Mr Kazmi said the contracts were awarded in such a manner that none of the plants ever reached the official commercial operation date (COD). The PPRA rules were also violated, meaning that transparency was compromised on a number of occasions.
When the court asked about inaction of the government to contain the losses, the counsel for Nepra urged the court to interpret certain sections of the rules under which the regulator could be penalised for suspending the licence of a power plant. However, the court could suspend a licence after holding the deal as “not transparent”.
Anwar Kamal raised questions about the RPP contracts. In the case of a ship-mounted power plant, he said documents issued by the Customs Department clearing the import of the machinery concerned needed to be checked. At this, the court asked officials of the water and power ministry to submit the documents on Thursday.
Mr Kamal tried to establish that time was of the essence in the case of the RPPs, but the manner in which the contracts were awarded “negated the norms of prudent decision-making”.
He questioned the logic of setting up plants on emergency basis at a time when existing plants had idle capacities. “Why was a loan of Rs21 billion secured from banks for payment to generation companies as advance mobilisation funds? The same amount could have been diverted to the Independent Power Producers for purchase of fuel for utilisation of idle capacities there.”
