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SC questions signing of RPP deals despite gas shortage

14 December, 2011

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ISLAMABAD: The Supreme Court (SC) on Tuesday questioned why the government failed to use Independent Power Producers (IPPs) optimum level and signed Rental Power Projects (RPPs) contracts despite knowing there would be gas shortage in the country.

A two-member bench of the apex court, headed by Chief Justice of Pakistan Iftikhar Muhammad Chaudhry, was hearing identical petitions filed by Federal Minister Faisal Saleh Hayat and PML-N MNA Khawaja Asif alleging corruption in the RPPs contract.

Counsel for Pakistan Electric Power Company Limited (PEPCO) Khawaja Tariq Rahim contended that RPPs accords were signed due to growing demand of electricity in the country. He said water shortage and more electricity demand were major reason for load shedding.

Presenting a report before the bench relating to RPPs approval, Rahim said all the contracts were granted according to rules and regulations and transparency was observed.

The CJP said the report was based on assumptions. It has been expressed in the report that load shedding would be over in case 14 RPPs and IPPs generate power jointly, whereas eventually power shortage still exists, the CJP remarked. The RPPs report was not sent to the cabinet for approval, he observed.

He said power tariffs were skyrocketed on the pretext of fuel adjustment. "Why accords were signed when there was not gas in the country?" the CJP asked. The CJP added that except Gulf Power Plant no RPP was generating electricity or paying taxes. Asian Development Bank (ADB) report on RPPs was a charge sheet against the government, he added. The court adjourned the hearing till today (Wednesday).

End.

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