Seven local rental power companies have cleared dues, PAC told

ISLAMABAD: The Rental Power Project (RPP) scam of the previous government of the Pakistan People’s Party (PPP) Thursday landed in the Public Accounts Committee but seemingly the committee did not touch the issue while deferring the matter till the completion of the probe of the National Accountability Bureau (NAB).
The Audit Department calculated and deducted the irregularities more than Rs80 billion in 10 Rental Power Projects on the basis of the irregular mediation instead of arbitration, loss due to award of rental contract without competitive bidding, non-compliance of Nepra instructions, irregular terms of thermal power plant for a period of five years instead of 3-years, wasteful expenditure due to non-achievement of commercial operations, loss due to non-supply of gas, and loss due to non-encashment of advance payment guarantee
PAC held its meeting Thursday with its Chairman Syed Khursheed Shah in the chair. The meeting also examined the audit paras relating to Ministry of Water and Power for the financial year 2010-11.
However, Nawaz government’s decision to allow seven local rental power companies which were accused in Rs80 billion scam of the Rental Power Projects to continue their Rental Power Projects also came under discussion in the meeting and there was firm opinion that the government should not purchase electricity from these rental power companies till they clear itself from the courts.
The National Accountability Bureau told PAC that the seven local rental power companies have cleared their dues after plea bargain with NAB while three foreign companies including Karkey, General Electric and Einstein did not clear their dues.
The NAB representative told the Committee that efforts were being made for recovery from the foreign companies.The NAB official further told the committee that the five references have been filed in the accountability courts and other references are under process for filing in accountability courts
Secretary Ministry of Water and Power told the Committee that the Economic Coordination Committee of the Cabinet had decided that those companies which were cleared by the courts after paying their dues be allowed to sell their electricity as per Nepra rules.
Sheikh Rasheed Ahmed observed that if it was a wrong in the past then how it was justified now. After a brief discussion, Chairman PAC Syed Khursheed Shah has deferred the audit paras relating to the Rs80 billion scam of Rental Power Projects till the outcome of the courts’ verdicts.
Earlier, PAC seemingly condoned the irregularity during tenure of PPP government that unlawfully recruited 7000 staff in the distribution companies such as Fesco, Gepco, Iesco, Lesco and Mepco that sustained a loss of Rs442.14 million.
The audit official told PAC that the managing director Pepco vide letter No MD/GM (HR)/HRD/A-551(09)/400-4218 dated October 10, 2009 exempted the entrance test for selection process against 50% of the vacancies for BPS-16 in Corporate entities under Pepco and in five entities 6,984 candidates were recruited in the light of MD’s instructions.
Chairman PAC Syed Khursheed Shah wanted to settle the para. However, the deputy auditor general objected on it saying that if the para was settled then it will become precedent in future. On the objection of the Audit Department for settling the para, Sheikh Rasheed Ahmed instead of PAC Chairman Syed Khursheed explained to the Audit Department it was not settled but pending the para.