ISLAMABAD: The appointment of Nadeem Babar as Special Assistant to Prime Minister by none other than Prime Minister Imran Khan, who has been fighting against the menace of the conflict of interest all the time in the past, has triggered controversy across the country. Nadeem Babar is a major player of energy sector and still holds the shares of Orient Power--- an independent power producer (IPP).
The Orient Operating Company Private Limited is an affiliate of the Orient Group and operates in the energy sector i.e. power generation and oil exploration. The company is also a joint venture partner in oil and gas consortium comprising partners that include Pyramid Pakistan Petroleum Inc, Orient Operating Company Private Limited, RDC International Private Limited, Nativus Resource Limited and Paige Limited.
The Orient Power is the biggest defaulter of Sui Northern Gas Pipelines Ltd (SNGPL). However, his appointment has also put the integrity and credibility of prime minister on spot. The Orient Power, which was earlier owned by Babar Nadeem, in which he still has substantial volume of shares, is the biggest defaulter of SNGPL causing surge in the circular debt of the gas company, reveals the secret documents of SNGPL available with The News.
The emergence of circular debt in RLNG sector has increased the financial miseries for the Pakistan State Oil and on top of it the IPP like Orient Power is aggravating the liquidity situation of Sui Northern making it unable to timely pay the dues of the PSO. As of December 5, 2018, Orient Power owes Rs2.659 billion to SNGPL but the bitter fact is that the said IPP continues to utilize the costly RLNG which is the imported fuel even despite being declared the defaulter.
The documents show that Orient Power generated 65,244,756 kWh electricity by RLNG fuel. The News also came to know that the former Managing Director of SNGPL had issued a disconnection notice to Orient Power Plant. The expiry date of the last notice was 9 November, 2018, but on account of influence of Babar Nadeem who is close to Prime Minister Imran Khan and was earlier enjoying the slot of advisor to PM on Energy and is now working as the special assistant to PM on Petroleum Division, the MD SNGPL not only failed to receive any amount from the Orient Power, but also remained unsuccessful to disconnect the gas connection.
According to SNGPL documents, the Orient Power owes Rs603 million to Sui Northern in the head of gas charges, Rs419 million in the head of RLNG charges and Rs1.637 billion as Late Payment Surcharges (LPS). The story does not end here as other IPPs that include Saphire Electric Power also owes Rs 783 million to Sui Northern and Saif Power Rs573 million.
When contacted by The News, Babar Nadeem, flatly refuted the charges declaring them as absolute rubbish. He said the Orient Power has won case on dues in Arbitration Court and the other was won by the Sui Northern.
The Sui Northern now wants a decree from the local court on the case that it has lost. Nadeem agrees that the enforcement of the decision by arbitration court cannot be implemented unless the local court gives a decree.
On being declared defaulter on gas, he said unless and until the local court gives the decree against Orient power, only then he can be declared defaulter. However, at present the case is in the local court. The Sui Northern was also defeated by Saphire Electric Power and Saif Power in arbitration court.
Nadeem said he abandoned the Orient Power in August 2018 but he is still a share holder.
Nadeem was introduced to the prime minister by the most important personality who was once considered Number 2 in the party but later disqualified by Supreme Court. Nadeen was earlier made the chairman of the energy task force. Now Nadeem has become so close to Prime Minister to call all the shots i the energy sector. Nadeem played a vital role in appointing the new members of board of directors of many entities that include OGDCL, PSO, SNGPL, SSGC, and PPL.
Nadeem was sent a questionnaire through WhatsApp. He was asked that the electronic media is saying that your appointment as special assistant to PM on petroleum division is example of conflict of interest as you are a major player in power, oil and gas sector. You are the owner of Orient Group and you own the Orient Power. You have been in litigation with Pakistan's Sui Northern in London Court of Arbitration. The Orient Power is still the defaulter of Sui Northern and continues to get gas from the company. Sir, Orient Power has won one case against Sui Northern but lost another.
Will you explain your viewpoint in detail? Please also respond if the Orient Power is still getting gas from Sui Northern. And in the last interaction you told me "I am chairman of energy task force and not allowed to interact with media." You also told me that you have left the Orient Power but still own shares of the company. Sir can I ask about the volume of shares you still have of the Orient Power. Sir I also need your answer on the electronic media report that you played a vital role in installing your blued ones in the new BoDs of SN, SS, OGDCL, PSO, PPL etc. And also respond about another news circulating in the town that Jehangir Tareen is the one who brought you as special assistant to PM on Petroleum Division. Is that right?
Nadeem Babar responded by saying that there is a statement of facts by the lawyer of the Orient Power in today’s (April 20, 2019) newspapers including The News. He said: ‘I have not assumed the charge as special assistant to PM on Petroleum Division yet and after that I will interact with media persons. When the scribe stressed that even in the presence of the statement of facts, the question of conflict of interest is still very much there.
Please respond that if the man representing the power sector market is made incharge of the Petroleum Division (it’s attached department Sui Northern) against which his company is still in litigation, Sir, doesn’t it mean that it is the conflict of interest and also please clear your position as it is being mentioned in the electronic media that Jehagir Tareen played a vital role in elevating you to the position of special assistant to PM on Petroleum Division.
Nadeem Babar responded saying: ‘I know a lot of people including Jehangir Tareen sb, but please understand that Imran Khan the Prime Minister of Pakistan takes the decisions by himself. As far as the conflict of interest issue is concerned, I don’t give any direction to anyone related to Orient Power. People use this term without understanding and without knowing how to resolve it. When his attention was drawn to the fact that Umar Ayub, Minister for Power, was given the charge of Petroleum Division and if that is the reason that he didn’t take the charge of the Petroleum Division as a special assistant to PM, Nadeem Babar didn’t come up with a reply.
However, the statement of facts by Advocate Salman Akram Raja, appeared in the national dailies clearly says that Orient Power is not the defaulter of Sui Northern, saying it is being supplied gas by Sui Northern for operation of the plant. Orient Power has made payments to Sui Northern equal to all amounts due for natural gas actually supplied to it.
It further says that a dispute has existed between Power Orient and Sui Northern since 2009 over certain amounts claimed by SNGPL as payable on account of a clause in the Gas Supply Agreement between Orient and Sui Northern that has never been interrupted by the courts of Pakistan in the past. According to Sui Northern, this clause allows it to forfeit an amount of Rs603 million paid by Orient to Sui Northern on account of delay in the commissioning of the power plants operated by Orient, over and above the value of the natural gas actually supplied. It is also the position of SNGPL that this amount is not equivalent to any actual loss suffered by it on the account of the delay in commissioning of Orient Power Plant.
The Orient Power has always been willing to pay an amount equal to the actual loss, if any, suffered by SNGPL on account of the delay in the commissioning of power plant. In accordance with the terms of gas supply agreement between the two parties which is governed by laws of Pakistan, the dispute was referred to Justice Ramday, former judge of the Supreme Court of Pakistan, for his expert opinion in October
2013. Justice Ramday’s expert opinion issued in June 2014 fully vindicated position of Orient Power company and found against SNGPL on all counts.
The statement further says that an arbitration award was subsequently rendered by a Malaysian lawyer acting as sole arbitrator in favour of SNGPL on Feb 27, 2017. This award is entirely at variance with the experts’ opinion Justice Ramday in its interpretation of the laws of Pakistan. It also says SNGPL has sought enforcement of the arbitration award against Orient and has for this purpose approached the LHC. The matter is presently sub judice before the division bench of LHC. On March 9, 2016, an award governed by the procedures of London Court of International Arbitration (LCIA) regarding a different dispute was rendered in favour of Orient in the sum of Rs229 million against the SNGPL.
The amount of this award set off by Orient against the current gas bills. This set off was not interfered with by the LHC and the Supreme Court. The SNGPL has challenged the set off before the gas utility court at Lahore and has also filed for proceeding before the LCIA.
The Orient has, on several occasions, suggested an overall amicable settlement to the SNGPL. The matter is now before the courts of Pakistan where it will be adjudicated upon and resolved strictly in accordance with the law.
So in view of the above mentioned facts, it is incorrect to declare that the Orient Power Company is a defaulter.
SUKKUR: Two incidents of robbery were reported in Khairpur on Tuesday.The house of Hazoor Bakhsh Chang, a retired...
SUKKUR: The 24th Convocation of Mehran University of Engineering and Technology, Jamshoro, was held on...
SUKKUR: Land dispute claimed lives of four people including a man and his son, in two different incidents in Larkana...
UNITED NATIONS: The Taliban have asked to address world leaders at the United Nations in New York this week and...
ISLAMABAD: The Kashmir Freedom Front and Jammu and Kashmir Mass Movement pleaded the international community to raise...
LONDON: Punjab CM Usman Buzdar has appointed Syed Tariq Mahmood-Ul-Hassan as Vice Chairperson of Punjab Overseas...