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SC directs PEPCO to recover Rs 1.35bn markup from RPP

22 November, 2011

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ISLAMABAD: The Supreme Court on Monday directed Pakistan Electric Power Company (PEPCO) to ensure recovery of Rs 1.35 billion from Reshma Rental Power Project as markup after getting Rs 4.57 billion given to it as a mobilisation advance amount.

The court was informed that the government had secured a total of Rs 21.84 billion bank loans to pay mobilisation advance to the Rental Power Plants (RPPs) by pledging the assets of the National Transmission and Dispatch Company.

A two-member bench headed by Chief Justice of Pakistan Iftikhar Muhammad Chaudhry was hearing the RPPs case on Monday.

The court directed the Ministry of Water and Power to submit details pertaining to customs duties levied on import of the RPPs machinery after consulting with the Federal Board of Revenue through which the court would examine that what irregularities and illegalities took place in the process.

The court observed that while giving these projects, the department did not realise the given tariff by NEPRA neither they considered the purchasing power of the masses.

The Ministry of Water and Power was directed to submit details of the electricity generated by these RPPs during the last three years and rates given to them.

During the hearing, the PEPCO chairman submitted before the court that PEPCO had received Rs 4.57 billion from Reshma RPPs while Rs 1.35 billion markup was still pending for which they had been given a notice.

He said that if they would fail to pay the markup, their machinery would be confiscated.

The chief justice observed, "It was an unguided missile which always hit the poor masses while privileged people were taking advantage of this."

The CJP further observed that a poor person was bound to feed his family with hot water while public exchequer was being looted by some influential people.

"Public exchequer must be saved and no one be given relaxation in this regard," the CJP observed. "Now people are asking us that you are the chief justice of Pakistan and what have you done for the poor masses," the CJP added.

He said that industrial sector had been damaged due to the load shedding.

Anwar Kamal, an amicus curiae, apprised the bench that Ministry of Water and Power imported machinery of the RPPs by itself after amendment of the Customs Tariff Act through SRO instead of the names of the RPPs owners.

He further said that as per the Customs Act, a temporary exemption to import RPPs was extended for three years only but contract with Karkey plant was made for five years, adding that total cost of Karkey plant was Rs 18.5 billion.

He contended that scrap was imported from China, which was installed as power plant in some localities.

On the occasion, the court was told that the RPPs were receiving full amount as per contract but power generation was not up to the mark and electricity tariff was increased due to less generation in the electricity. The court adjourned the hearing till today (Tuesday).

End.

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