NAB finalises issues related to RPPs: Turkish plant finally may go back shortly | Business Recorder

12/6/12 1:22 AM

NAB finalises issues related to RPPs: Turkish plant finally may go back shortly
The barge-mounted Turkish Rental Power Plant, which is lying idle for the last four months after the Supreme Court''s (SC) decision against rental power projects, is likely to go back to its home country as the National Accountability Bureau (NAB) has finalised issues related to rental plants. According to sources a settlement has been made with the Turkish company Karkey Karadeniz Elektrik Uretim (KKEU), as a result of which the ship based plant, would be leaving for Turkey from the sea near Karachi. Interestingly, the barge mounted rental plant that aimed to provide over 230 megawatts electricity to the national grid, was finally all set to move from the country after around two years, making huge losses for Pakistan and, what the company had claimed, the KKEU itself. As per the settlement made under the directive of the SC, the Turkish company would be paying a penalty to the Government of Pakistan for not meeting the agreed terms. Talking to Business Recorder, Zafar Mehmood, Federal Secretary Ministry of Water and Power confirmed that NAB had finalised the issues related to the rental power projects, including the Karkey plant. A report in this regard would be submitted to the SC soon. He, however, declined to give more details saying that the matter was subject to NAB.
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NAB finalises issues related to RPPs: Turkish plant finally may go back shortly | Business Recorder

12/6/12 1:22 AM

Official sources at KKEU in Pakistan also denied commenting on the issue.According to sources, previously, NAB had sought payment of over $180 million from KKEU during an inquiry initiated after the Supreme Court''s verdict calling for the dissolution of all rental power projects. The company summarily refused to deposit the amount. NAB had also obtained and issued an order to freeze Karkey''s banks accounts in Pakistan.The Port Qasim Authority had taken action against the firm on April 5, 2012, after the Supreme Court''s verdict calling for the dissolution of all rental power projects. The authority acted by issuing a notification which said that ''caution'' had been placed on Karkey''s vessels under Section 23 of the Pakistan National Ordinance. The notification further directed that vessels were not to move from their moored position until completion of the NAB inquiry, or before clearance from NAB.On the other hand, KKEU, in a legal notice served to the Government of Pakistan on May 19, 2012, had threatened to go to the international court if the issue was not resolved by the government. According to it, the GoP had violated the obligations of an investment treaty between Pakistan and Turkey, and that the breach of contracts was also in violation of international law.The foreign firm had also demanded that the government halt inquiries initiated by the NAB besides withdrawing the freeze, which was in place on KKEU''s bank accounts in Pakistan. The company had further demanded the release and permission for unhindered withdrawal of all vessels and equipment currently located in Pakistani territory.
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NAB finalises issues related to RPPs: Turkish plant finally may go back shortly | Business Recorder

12/6/12 1:22 AM

With the issue in dispute, sources at the foreign company claimed that it was facing loss of at least $0.315 million daily. According to them, the plant has suffred over $40 million losses so far in terms of daily expenses and others. At least $0.315 million losses are being made on a daily basis. According to them, for the maintenance and daily use of the plant, the management of the foreign firm was running generators. The Karachi Electric Supply Company, which was earlier supplying power to the ship to meet its maintenance needs had also stopped the supply after the SC''s verdict.Before the Sc''s verdict, the government as per Power Purchase agreement was paying $9 million per month as rental charges to the Karkey Power Plant that earlier was producing 30MW electricity against the 230MW committed in the agreement.

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