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HUBCO issue continues

Ehtesab Bureau Chief opens WAPDA-IPPs case to take the dispute to its logical conclusion at the earliest

From Shamim Ahmed Rizvi, Islamabad 
June 28 - July 04,1999

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Negotiations between various government departments on important issues have taken a 'U-turn'. The latest between the WAPDA Chairman, Gen Zulfiqar Ali Khan and Hub Power Company (HUBCO) when Ehtesab Bureau Chief has once again entered the field with sole authority to coordinate with all domestic parties to the issue including WAPDA and take the dispute to its logical conclusion at the shortest possible time.

This second time entry is on the strict directives of Prime Minister Nawaz Sharif. All parties involved in litigation with Hubco have been advised to provide assistance to the EB.

Many ups and downs have come in the GoP-IPPs controversy which started immediately after the present government came into power in 1997. First it was taken up by the Ehtesab Bureau which started investigations into the complaints of kick back and commission received by Asif Zardari who was instrumental in signing/revising agreements with IPPs, including HUBCO and KAPCO which were found by the present government highly detrimental to the national interest. The Ehtesab Bureau started its work in a typical Punjab Police style of harassment and intimidation. This caused a lot of problems for the government on the international. The bullying style and approach of Ehtesab Bureau marred all efforts of Board of Investment to allure foreign investors to Pakistan and the privatization programme of the government received a serious setback as no foreign investor was showing any interest. On the intervention of the World Bank and the IMF, Government of Pakistan had to withdraw the Ehtesab Bureau from the scene and appoint a committee of experts from the private sector to resolve the issue. The committee progressed well with other IPPs except KAPCO & Hubco where they could not reach an amicable settlement acceptable to both the parties. In the meanwhile, HUBCO, as provided in their agreement with the government of Pakistan, invoked the clause of arbitration.

Federal Minister for Water and Power Gohar Ayub Khan while replying to a question in the Senate, confessed that no concrete evidence of corruption has been found in the deals finalized with independent power producer (IPPs). "I am hopeful that the matter with IPPs would be settled within the next few weeks," he added.

He admitted, while responding to a supplementary question, that the government had withdrawn notice of intent to terminate the contracts of nine IPPs on charges of corruption and slow progress. He pointed out that some of these IPPs had their offices abroad and machinery was imported from there. The Ministry of Water and Power does not have arrangements to investigate corruption abroad and the government does not want to go to Arbitrary Commission unless it is 200 per cent sure that corruption had taken place in IPPs case," the Minister added.

The government felt that the Committee of private experts was "too slow" in its work while it required an urgent resolution of the problem as HUBCO had served a default notice on WAPDA for not making payment for electricity supplied as per agreement. The task of the resolving the dispute was entrusted to WAPDA Chairman Lt. Gen. Zulfiqar Ali Khan. Perhaps his failure report has prompted the government to again hand over the case to Ehtesab Bureau.

Sources at the Private Power Infrastructure Board (PPIB) told this correspondent that the new turn indicates a major shift in the policy of the economic managers who have now accepted the possibility of extension of the conflict in the aftermath of the negative response from the National Power (NP), the major sponsor of the Hub Power Company (Hubco) and Kot Addu Power Company (Kapco).

A letter has been written by Prime Minister's Secretariat to Wapda, PPIB, ministry of water and power and all other concerned asking them to provide assistance to the EB in dealing with the matter.

The letter has directed that a representative of Wapda should be available to the EB for assisting it in obtaining the required information from the authority, especially for lawyers already, dealing with the case and for a private consultant of Wapda on energy, Enerpo. The basic responsibility of this representative would be sharing the work-load, the letter added.

Moreover, it has also been directed that a high level representative of the ministry of water and power should be available for co-ordination, particularly through the PPIB.

Wapda Chairman has been directed by the EB to nominate a senior officer of the Wapda Private Power Office who is currently dealing with the matter, as the representative. Moreover, a senior joint secretary from the ministry of water and power has also been directed to assist the EB in this matter. While dealing with the corruption issues of Hubco, the EB was co-ordinating with Wapda, Private Power Infrastructure Board (PPIB), international and local law firms, private energy consultants Enerpo and ministry of water and power.