ISLAMABAD: The Senate Standing Committee on Finance Tuesday directed the Power Division to sort out the issue of Rs32.45 billion paid to the IPPs under idle/unutilized capacity with the Auditor General of Pakistan within two weeks, otherwise on failing the issue will be sent to the National Accountability Bureau (NAB) for inquiry.
In a meeting chaired by Senator Saleem Mandviwala, the committee expressed serious concern over the affairs of the government, especially of Central Power Purchasing Agency (CPPA) for its contradictory statements in the standing committee and the sub-committee meetings.
It is worth mentioning that the incumbent government after taking the charge in June 2013 paid Rs480 billion to the IPPs to retire circular debt.
There were some audit objections to the payment, including an Audit Para no 4.2.1 that termed payment of Rs32.451 billion unjustified made for idle capacity of power plants.
This audit report was laid before Parliament in 2015 and several meetings of the standing committee and sub-committee were held and briefings taken from government departments, but nobody justified this payment. “I am sorry that after two years, your department is searching for the papers [to justify the payment]; the department should be closed or outsourced to the third party,” Mandviwalla said.
Interestingly, when the committee asked the CEO CPPA Abid Latif Lodhi whether the money has been paid for idle capacity, he replied, “We have paid no money under unutilized capacity.”
Senator Kamil Ali Agha said, “Since the money has not been paid [according to the CPPA claim], then why at the same time, the CPPA was justifying its payment.”
The audit report say the money has been paid to IPPs for idle capacity, despite that there was huge demand for power and the country was facing up to 18 hours power outage, Agha added.
When he asked why the Auditor General of Pakistan was bypassed while making the huge payment in a single day, there was no response from the government side.
Mandviwalla said the issue had been discusses several times in the standing committee and subcommittee but they received no satisfactory response from the departments.
“We are now giving them two weeks to sort out the issues, after which we will send it to the NAB for further inquiry,” he said.
The committee also asked when there was no provision of ‘heat rate test’ in the power purchase agreement then why payment was made, why it had not been explained so far to the parliamentary body, and why the government took a stay order on from the court of law.
Senator Usman Saifullah however contested the committees’ stance saying that the audit’s allegation was very serious that the IPPs were given undue benefit.
He asked the auditor whether the IPPs had made additional profits by virtue of not producing electricity when by generation of power they could have make more profit.
The audit officers said through generation they could earn more profit than keeping the plants idle. Usman said when this was the case, then why the IPPs were blamed for taking undue benefits.
Secretary Ministry of Energy (Power Division) Yousaf Naseem Khokhar requested the committee that they may be given two-week time to sort this issue out. The committee granted them the time to settle the matter.
The meeting was attended by Senators Mohsin Aziz, Mohsin Leghari, Ayesha Raza, Murtaza Wahab, Osman Saifullah, Saud Majeed, Kamil ALi Agha, Minister for Energy Owais Lagahri, Secretary Power and other officials.
