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Turkish power plant must pay $120m: SC

November 27, 2012

ISLAMABAD, Nov 26: The Supreme Court settled a repayment dispute on Monday, directing the National Accountability Bureau to recover $120 million from a 232MW barge-mounted Turkish rental power plant.

NAB Director General (Operations) Shahbaz Bhatti informed a three-judge bench that $120m was outstanding against the plant, Karkey Karadeniz Elektrik Uretin AS Turkey. But NAB Prosecutor General K.K. Agha said that the final decision had to be taken by the bureau’s chairman.

The bench comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Gulzar Ahmed and Justice Sheikh Azmat Saeed had taken up the matter after Makhdoom Faisal Saleh Hayat claimed in a letter that the Turkish project needed to settle $243m but NAB had allowed the ship to leave Pakistan without paying the amount.

On Nov 20, the court had asked Mr Hayat and NAB officials to sit together and reconcile the payable amount that was estimated to be $120m after calculations. Mr Hayat objected, saying according to his estimate the amount was $128m but the court said it would not go into the nitty-gritty of the matter.

Anchored at Port Qasim in Karachi, the power plant was part of an initiative the government had approved to generate approximately 1,206MW through rental power projects as a stopgap arrangement.

But on March 30, the Supreme Court held the power policy and RPP contracts as non-transparent and ordered the NAB chairman to proceed with corruption references against those who were at the helm of affairs when the contracts were signed between 2006 and 2008.

The court said the NAB chairman would be responsible in case the estimation increased later.

The chief justice said Mr Hayat had unearthed a big scam in the power sector which would serve as deterrence for other departments.

Justice Gulzar said that under the agreement the power plant was the property of Karkey in Pakistan. He inquired from the NAB prosecutor general how the money would be recovered if the ship left. The prosecutor said the bureau would take bank guarantee from Karkey. When the court observed that NAB had given an undertaking that unless the entire outstanding amount was paid the ship would not be allowed to sail from Pakistan, the PG reminded it that the bureau had withdrawn the undertaking.