The Supreme Court directed Federal Board of Revenue (FBR) to submit a comprehensive report of Goods Declaration (Bills of Entries) relating to Rental Power Plants (RPPs).
A two-member bench comprising Chief Justice Iftikhar Muhammad Chaudhry has been hearing RPPs case. Chairman FBR Salman Siddique, Waseem Sajjad, counsel for the former minister for water and power Raja Pervez Ashraf, and Shahid Hamid, counsel for Walters International, appeared before the bench.
During the course of hearing, the Chairman FBR submitted he had collected all the documents relating to taxes levied on imported machinery of RPPs and would compile a comprehensive report to be presented on the next hearing.
The bench observed that the SC intervention made it possible for the government to recover a substantial amount from rental power projects.
Justice Arif Khilji remarked that the government signed RPPs and gave advance of billions of rupees to RPPs, but the people got nothing in return except less electricity. Sajjad submitted that Raja resumed his office as a minister of Water and Power on March 21, 2008 whereas RPPs issue surfaced much before he joined the federal government.
The Chief Justice questioned about the number of contracts for RPPs that were signed during his tenure. Sajjad responded that “a couple of them” were signed under his client’s ministry, but the policy was already there and the bidding process was almost complete.
He submitted that Gulf, Karkey, Reshma and Naudero were the main RPPs signed by his client’s ministry. The CJP observed that in the case of Karkey, no advertisement was made.
Sajjad submitted that when his client took charge as minister, there was agitation against loadshedding across the country and power shortages then had become an election issue. His client, therefore, decided to continue the RPPs policy as it was the only short-term and speedy remedy to overcome the crisis, the counsel added.
He further stated that it was a wrong impression that his client pursued that policy to make money. According to him, there was no loadshedding in the country after 2009.
He further submitted that all decisions regarding RPPs were taken by the ECC and federal cabinet during the tenure of the former government.
The CJP observed that the counsel was himself part of the former government, which was unfaithful to the country.
Sajjad submitted that there was no doubt that there existed power shortages, but his client made efforts to ensure transparency by adopting International Competitive Bidding (ICB).
He submitted that RPPs were undoubtedly expensive but the government had no other option to overcome shortage of power. He stated that rates were also approved by Nepra and as far as implementation was concerned, it was the duty of the line department and the minister was not responsible for that failure. According to the counsel, an increase in mobilization amount was approved by the federal cabinet.
The CJP asked him to clarify the responsibility of the minister under the Rules of Business. Justice Khilji asked him why his client did not wait for the other bidders. “He might have got some other bidders if he tried to get cheap electricity,” Justice Khilji observed.
Sajjad submitted that no money had been looted in this regard and that every penny was recoverable. The CJP asked him about the recovery that they had made up-till now and whether it was because of his client’s own efforts. Sajjad informed the bench that Reshma had returned all the money while the interest would be paid soon.
The CJP remarked that it was the duty of a minister to frame a policy but all was done in the absence of any concrete policy.
“If you had any policy in RPPs, just show it to us so that we could be satisfied that you did something in accordance with law,” the CJP added.
Sajjad submitted that it was decided by the federal cabinet and he would produce the policy document during the course of his arguments. According to Sajjad, the ministers never make any policy for the approval of the cabinet. The previous government faced some problems due to gas shortage and it then decided to go for some RPPs which could be able to work on dual fuel system.
The CJP regretted that all such experiments were made after getting international loans, but these RPPs were not working properly.
“All such things were the prime duty of the minister but your client was not bothered about the success of RPPs,” the CJP remarked.
Praying for more time to continue his arguments, Sajjad replied that everything that happened under his client’s ministership was transparent.
The bench adjourned the hearing till Nov 23.