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PPP asks govt to come clean about IPP payments

23 July, 2013

ISLAMABAD: The Pakistan People's Party (PPP) has asked the finance minister to come clean about Rs 322 billion paid to IPPs in order to clear the circular debt and make public the website on which this information is claimed to have been uploaded.

The finance minister, in an interview published in a local newspaper, claimed that payments to IPPs had been made "transparently and details have been placed on the web".

PPP Senator Farhatullah Babar said in a statement on Monday that a search of the websites of Ministries of Finance and Water and Power, WAPDA and OGRA revealed that no such details had been uploaded.

"If the information is not placed on the website of the related ministries and departments, then where has it been placed?" he asked, adding, "This has raised legitimate questions of transparency and accountability".

He said that the information available on the website of Finance Ministry about a July 2 meeting simply says that the ECC was informed that a sum of Rs 322 billion has been paid to the IPPs.

"It is a bare statement of fact known to everyone. What was needed to be disclosed but has not been made public are the details about the power produced by each IPP, the time during which it was produced, the rate at which it was paid and the total amount paid to each power producer," the senator said.

A detailed technical audit of the IPPs was an essential pre-requisite but no such audit was actually carried out before doling out billions of rupees to power producers, he said. "Who knows if a game of favourites has been played in the week during which hundreds of billions of rupees were paid," Farhatullah Babar said. He said that in order to create an impression of transparency and accountability, the website of the Finance Ministry claims that the IPPs signed an MOU pledging to fulfil certain conditions before payments were made to them.

However, he added, on closer scrutiny it becomes obvious that it is no more than a false impression.

The first condition which the IPPs are said to have agreed to, he said, is that all the thermal power plants exceeding 2,000MW capacity would be converted into coal fired plants.

"It amounts to hoodwinking people as there is hardly any thermal IPP of more than 2,000 MW capacity. What is flaunted as a great achievement is in fact a ruse to create and sustain false hopes that plants using more expensive fuel are being remodelled so as to run on a widely available cheap fuel of coal," he said.

"The second condition claimed to have been agreed by the private power producers, according to the website, is that they will optimally utilise the available plant capacities. However, in the absence of technical audit giving complete information about a plant's available capacity, the optimal capacity that is desired to be achieved and the time frame within which it is to be achieved is no more that a vague promise and a false hope," he said.

A third condition claimed to have been agreed by the private producers is a one-month extension allowed by them to PEPCO to make payments. This measure will only give a breather of one more month but will not address the issue of spiralling debt itself which will resurface again as long as the huge difference between the cost of power production and the price at which is sold persists, he said.

Senator Farhatullah Babar said that there is total absence of transparency and a veil of secrecy seems to have been woven around the payments of Rs 322 billion made to the private producers.

"Doubts will linger and questions will continue to be asked until the shroud of secrecy is shredded and all relevant information is uploaded on the web and the nation is informed about where it is available."


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