Islamabad: National Accountability Bureau (NAB) has held business tycoon Mian Mansha M/S Nishat Chunian Power Ltd in Pakistan for alleged involvement in an illegal gain of Rs. 8.36 billion.
The Power Division has approached Cabinet Committee on Energy (CCoE) to revise the master agreements with IPPs under Power Policy 2002 in Pakistan.
NAB has establishing against M/S Nishat Chunian Power Ltd, due to the determination of tariff at the higher side. NAB further intimated that “Ministry of Energy, if so desired, may proceed under power policy 2002 after securing the amount of loss caused to the state as established during the above stated NAB investigation in the best interest of the state.
Cabinet Committee on Energy (CCoE) on September 24, 2020, constituted an Implementation Committee for, inter-alia, implementation of MoUs.
Cabinet Committee on Energy (CCoE) and ECC considered the Report by the implementation Committee and approved the payment mechanism and agreements with IPPs in meetings held on February 8, 2021, and the cabinet had ratified the same on 9th February 2021.
On a summary of the Power Division submitted on 5 May 2021, ECC decided and Federal Cabinet ratified the following decisions of the ECC.
A: Government may process Payments to all IPPs (under Pre-1994, 1994, and 2006 Power Policy) accordingly to the signed Agreements except the IPPs under Power Policy 2002 until the conclusion of the NAB investigation.
The matter of the alleged saving in the tariff component of IPPs of 2002 Policy is already under investigation by the National Accountability Bureau.
It may request an anti-corruption watchdog to examine and validate the process negotiations and signing of agreements including the Arbitration Submission Agreement.
NAB may also inform if they have any objection to the signing of these agreements a making of payments to the IPPs of 2002 Policy.
The Power Division accordingly conveyed the decision of ECC, the cabinet had also ratified to NAB on May 25, 2021.
In view of the previous decisions by ECC and Federal Cabinet, Power Division submitted a summary for the consideration of ECC with the proposal of the payments to IPPs (under Power Policy 2002) may continue to be withheld, and signing Arbitration Submission Agreement with these IPPs and notification of the tariffs as determined by NEPRA may remain suspended till NAB investigations are concluded. However, the agenda was deferred.
NAB has now informed that it had established illegal gain of Rs. 8.36 billion against M/S Nishat Chunian Power Ltd, due to the determination of tariff at the higher side. NAB further intimated that “Ministry of Energy, if so desired, may proceed under power policy 2002 after securing the amount of loss caused to the state as established during the above stated NAB investigation in the best interest of the state.
It is worth mentioning that the illegal gains of Rs 8.36 billion established against Nishat Chunian by NAB is almost the amount determined by the negotiation committee.
The committee for power sector audit had also determined similar amounts against other independent power plants (IPPs) of the 2002 Policy in Pakistan.
NAB in its letter is talking about the agreements with all IPPs of the 2002 Policy.
Agreements with 2002 IPPs, the Implementation Committee finalized, do not provide a deduction of illegal gain IPPs and the agreements already inked will need revision.
In order to review the Agreements, the same process needs to follow, which negotiation committee followed for earlier approval i.e. negotiation by the Implementation Committee with the IPPs and approval by CCoE before referring the matter to ECC of the Cabinet.
Keeping in view this background, the power division has submitted recommendations to CCoE for approval.
The CCoE had established the Implementation Committee in September 2020. Power division proposes to assign it the responsibility of renegotiating the Master Agreements with IPPs established under 2002 Policy to cater to the above-mentioned letter from NAB.
The power division may submit the outcomes of the re-negotiations by the Implementation Committee for consideration and approval by CCoE.