September 23, 2019
Former CEO of Lakhra Power Generation Company Limited (LPGCL) Anwar Brohi’s name was excluded from the list of suspects in the Rental Power Project (RPP) case after he agreed to enter a plea bargain with the National Accountability Bureau, the investigation officer of the case told an accountability court on Monday.
The plea bargain, which will see him return north of Rs8.5 million, was approved by NAB Chief Javed Iqbal, the investigation officer told the court.
Brohi was arrested by NAB in connection with the case in 2014, but was soon granted bail. The case also involves PPP leader and former prime minister Raja Pervez Ashraf, as well as other prominent personalities. The accused are believed to have illegally awarded a contract to Karkey Karadeniz Elektrik Uretim (KKEU), a Turkish company, for installation of a rental power project in Karachi.
KKEU was one of the 12 rental power companies that had been awarded contracts by the PPP government in 2008-09 to ‘resolve’ the power crisis.
A ship was brought to Karachi port in April 2011 to provide electricity to the national grid under the then government’s RPP policy to overcome the energy crisis. However, it failed to generate 231 megawatts as was required under the agreement, even though $9m had been paid to the company in advance as capacity charges.
The plant produced only 30-55MW of electricity and that too at a cost of Rs41 per unit, which was a serious breach of contract, according to the prosecution. This led to a 50 per cent increase in the refund claim by the government, from $80m to $120m.
According to NAB, after filing of the reference against Karkey, the Turkish company had requested a plea-bargain deal and said it was ready to pay $18m to NAB and promised not to go for international arbitration.
However, some politicians moved the Supreme Court and the then chief justice Iftikhar Mohammad Chaudhry had struck down the deal and insisted on recovering the full $120m from the Turkish firm.
As a result, Karkey moved the International Centre for Settlement of Investment Disputes (ICSID) in 2013, seeking compensation of $800m for the losses incurred by its vessels in terms of damage or depreciation for not being allowed to leave Karachi port for almost 16 months. The Turkish company later won the case in 2017.