Supreme Court asks government to set priorities on interests of the country responsibly

Supreme Court asks government to set priorities on interests of the country responsibly

Islamabad (December 16), The Chief Justice of Pakistan, Justice Iftikhar Chaudhary, while hearing the case about rental power plants, asked as to why the government had failed to optimize the generation capacity of independent
power producers (IPPs) reliant on sources other than gas for fuel rather than on Rental Power Projects (RPPs) in spite of being fully cognizant of the looking gas shortage in the country.

This question was raised repeatedly both in the media, as well as by the independent third party audit insisted on by the then Finance Minister, Shaukat Tarin, during a cabinet meeting.

The audit report also highlighted other critical failings in the RPP contracts signed by the government, notably the changing of the terms of reference after the bids were received in violation of the Public Procurement Regulatory
Authority rules and agreement to give the RPPs full payment for capacity generation even if an RPP was unable to operate at that level because of the inability of the government to provide the necessary gas.

And surprisingly, the audit report also concluded that a far better option would be for the government to support full capacity generation, estimated at 2000 MW, from the existing generation plants as well as 1133 MW untapped energy
from the IPPs which would ensure minimal load-shedding.

The fact that the government opted for RPPs notwithstanding that such support defied any economic rationale was a reflection of the fact, in the words of Faisal Saleh Hayat of the PML (Q), that the main objective of the RPPs was not to meet the energy shortfall
but to make some influential individuals extremely wealthy.

In this context, it is relevant to note that federal Finance Minister Dr Hafeez Sheikh, while inaugurating the three-day 27th annual general meeting of Pakistan Society of Development Economists (PSDE) arranged by the Pakistan
Institute of Development Economics acknowledged the role of the Chief Justice in generating 100 billion rupees through speedy disposal of cases.

In November this year, the Supreme Court ordered Reshma Power Plant to return 4.5 billion rupees to the government which it took as mobilisation advance two and half years ago.

The Supreme Court has reserved its judgement in this case and one would hope that the country will be able to retrieve some of the money inappropriately spent on this sector.

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Posted by Fayyaz Yaseen on Dec 16 2011. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry