NAB summons NEPRA over case of unprecedented profits earned by IPPs 

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ISLAMABAD: The National Accountability Bureau (NAB) Lahore has summoned officials of the National Electric Power Regulatory Authority (NEPRA) to appear Monday, 18 February and submit verified reports/records regarding independent power producers (IPPs).

According to sources, NAB, in a letter to Registrar NEPRA, dated 14 February 2019, has asked to depute a team (technical/financial) to appear before the Combined Investigation Team (CIT) of NAB Lahore on 18 February 2019.

The bureau is conducting the inquiry under the provisions of NAO,1999 against Nishat Chunian Power Limited (NCPL), officers/officials of NEPRA and Central Power Purchasing Agency (CPPA) and others. In this regard, detailed workings conducted by NEPRA (rationales, surveys/due diligence) to determine the cost plus tariff for 200 MW (megawatt), RFO (residual fuel oil) based IPP, Nishat Chunian Power Plant was requisitioned.

Sources said that NEPRA had earlier submitted reports with NAB which were not certified and due to this, NAB sought clarification on the matter, adding that that NAB has now summoned NEPRA officials and asked for the submission of verified documents/reports under section 19 of National Accountability Ordinance, 1999.

Sources also said that the independent power producers (IPPs) and the owners of power plants which were installed during the tenure of the former government of Pakistan Muslim League-Nawaz have been earning additional profits around $1 billion annually, allegedly because of fake records and collection of additional tariffs.

They said that the owners of thermal, coal, wind and solar power plants will additionally collect $19 billion during the next 25 years while the IPPs which are running on oil and gas including Nishat, Chunian, Liberty, Atlas Power etc have earned additional profits in the range of 20 to 64 per cent other than the fixed limit of profits for them. They said that NEPRA had taken notice over additional profits to IPPs in 2014 but stopped the process of inquiry after the passage of one year.

They added that NAB Lahore has expanded the scope of the investigation against additional profits by IPPs and summoned NEPRA officials while the initial inquiry report of NAB has allegedly made responsible officials of the Punjab government, NEPRA and Alternative Energy development Board (AEDB).

A copy of documents available with Pakistan Today reveal that due to the approval of additional tariffs, owners of coal power plants will earn $14.25 billion, while the owners of solar plants will earn $900 million, wind to earn 1.8 million and fuel oil-run power plants will earn $90 billion during the next 25 years allegedly because of an approval of additional tariffs.

Sources in NAB said that power plants installed under the power policy of 2002 and in the rule of PML-N have become a burden on the national exchequer.

They said that Nishat Chunian Power Limited had earned 44.25 per cent profit on equity investments against 14 per cent RoE based on IRR during the financial year 2010-11. Nishat Chunian was asked to explain the reasons for earning additional profits.

Responding to NEPRA, Nishat Chunian power Ltd said that allegations pertaining to submission of fake records during the time of tariff determination were wrong and baseless. However, NEPRA rejected the stance of Nishat Chunian Power Ltd and asked to submit a reply within seven days to avoid action against the company.

Nishat Chunian was also advised to submit a separate statement within 15 days pertaining to its regulated profit and asked to include the financial impact of all items in the statement. Nishat Chunia Power Ltd was also informed about initiation of a suo motu action in case of no proper response over the said inquiry. However, despite the passing of one year, the inquiry has been closed without taking any final decision regarding billions of rupees worth additional profits by influential owners of power plants, said sources.

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