ISLAMABAD: The Supreme Court hearing allegations of corruption in the purchase of rental power plants (RPPs) indicated on Tuesday that it might scrap the contracts if these had been awarded in a non-transparent manner.

“We only have to examine whether the projects were done in a transparent manner,” observed Chief Justice Iftikhar Mohammad Chaudhry, who heads a two-judge bench hearing applications of PML-Q legislator and Housing Minister Makhdoom Faisal Saleh Hayat and PML-N leader Khwaja Asif who alleged corruption and mismanagement in the setting up of RPPs. In 2009, the federal government approved RPPs for generating 2,206MW of electricity to tide over the shortfall. But the project became controversial after Saleh Hayat, a vociferous opponent of the government’s power policy, came up with serious allegations of corruption against former water and minister Raja Pervez Ashraf.

Mr Ashraf is also attending the court proceedings and will come up with his response after the parties in the case complete their arguments.

Currently only two or three of 19 RPPs are functioning because of government’s lack of interest in pursuing them as well as refund of advance mobilisation funds along with mark-up by different RPPs on the instructions of the Supreme Court for their failure to import machinery and generate electricity.

“We are not concerned with the government policies, but our worry is whether relevant rules and regulations were adhered to in the award of the contracts for setting up different RPPs in the country,” the chief justice observed.

The court made it clear that it had to decide the matter strictly in accordance with rules and regulations. “We are heartless and have to award death sentences to the guilty even if they happen to be acquaintances,” the chief justice observed. “Our job is to dispense justice and justice alone. You never know, we may know Raja Pervez Ashraf, but we have to do justice.”

The court said the government had so far not come up with a clear stance that the RPP projects involving the public money had been taken up in accordance with the law.

Advocate Shahid Hamid, the counsel for Walters Powers International, said the company had spent $9 million on repairs of the Naudero plant on three occasions, which was eventually shut down on Oct 3 last year because of the fear that it might suffer further damage after it developed faults because of power fluctuations.

He said the company had not been paid a single penny by the government but was accused of taking away billions. The counsel said an amount of $750,000 was recoverable from the government, including $250,000 as performance generation cost and $78,000 as electricity bills.

The chief justice said he wondered how the plant was inaugurated by the VIPs when the COD (commercial operation date) had not been met.

“It was the president who inaugurated the project,” Advocate Shahid said.

But the chief justice told him not to mention the president’s name because the inauguration could have been done as a goodwill gesture. “President is not a technical person or knows about the nitty-gritty like the COD. Therefore, do not involve the president in such petty matters.”

The counsel said the issue relating to the COD had been sent to the Economic Coordination Committee of the cabinet which had the powers to relax rules, adding that Mr Hayat was also a member of the ECC.

But the chief justice said he wondered if the cabinet could bypass the rules to relax certain conditions in the case because it involved the question of transparency.

Advocate Shahid said tariff for electricity produced by the plant had been determined at 3.9 cents per unit by Nepra which regulated prices of power generation. The tariff, he said, was quite comparable with electricity produced by international power producers as it cost Rs7-8 per unit.

Advocate Khwaja Tariq Raheem, the counsel for Pepco, assured the court that the government would abide by rules and regulations set by the apex court in the LNG case.

The chief justice said the person against whom strictures had been passed in the LNG case was awarded later with another assignment.

The counsel agreed that anarchy would prevail if the court orders were not obeyed.

Justice Khilji Arif Hussain, a member of the bench, asked the counsel to tell the court what actions the government had initiated against the responsible persons behind the RPP issue.