The Chief Justice said that ADB report on RPPs had raised grave concerns over government's rental power projects and that the finance ministry also shared the responsibility in rental power policy. The ADB was assigned the job of third party evaluation under a decision of the federal cabinet to examine agreements with rental power projects sponsored by the water and power ministry to overcome electricity shortage, following public criticism over RPPs for being too expensive.
Khawaja Tariq Rahim, the counsel for water and power ministry, told the court that due to worsening electricity crisis in the country, the implementation of rental power projects plan had become inevitable. The main purpose of RPPs, he added, was to eliminate the loadshedding.
He also told the court that the ministry had invited tenders from national and international companies for RPPs. The Chief Justice asked why the tender-awarding ceremony for RPPs was conducted in London, adding that "whether the tender was awarded to foreign a company."
The counsel said the tender was awarded to Pakistan Power Reserves. However, the contract with the company was cancelled for not starting electric production and closure of plants, adding that Rs 230 million were given for Gudu Power Plant and Rs 700 million for Faisalabad power project.
He said that Rs 230 million would be taken back within two weeks after the cancellation of contract with Gudu Power Plant and efforts in this regard are under way. Justice Ramday said that the prime minister was not briefed about the tariff for the consumers. Chief Justice also observed that the burden of additional power tariffs would finally have to be borne by the general consumer.
Khawaja Tariq submitted that tariff could not be determined before the bid. That is why, he added, the prime minister was not briefed about it. According to him, electricity production from RPPs would not be expensive. "A number of shops are visited for price and quality before anything is bought whereas nothing happened like this in the case of RPPs", Justice Chaudhry remarked. Later, the court adjourned the hearing till November 29 with directions to the government to apprise the court about the number of plants installed so far, the cost occurred on them and power generation capacity of each plant.