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NAB arrests key suspect involved in rental power projects case

NAB arrests key suspect involved in rental power projects case

ISLAMABAD: The National Accountability Bureau (NAB) said on Wednesday it had arrested a major suspect in the Rental Power Projects (RPPs) case.

It may be recalled that in 2017 Pakistan lost the case in the World Bank’s International Centre for Settlement of Investment Disputes (ICSID). The case was filed against Pakistan by Turkish power company Karkey Karadeniz Elektrik Uretim.

According to the anti-graft watchdog, the Rawalpindi NAB arrested Laeeq Ahmed Sheikh during investigation against government officials for corruption, corrupt practices and misuse of authority in award of RPP’s contract to M/s Karkey Karandenis Electric Uratim of Turkey.

Mr Sheikh is the director of Cannock Global Enterprises Limited (CGEL) which has an offshore company. NAB investigations showed that the suspect had also been involved in laundering of illegal money of accused Raja Babar Ali Zulqarnain.

According to NAB, $365,000 was illegally transferred by Raja Babar Ali Zulqarnain from a bank of his offshore company M/s Lead Burn Global Ltd to BVI-based offshore company CGEL of the accused.

In Jan 2018, NAB Director General (operations) Zahir Shah had informed a meeting of the Senate Standing Committee on Law and Justice that “the government had formed a high-powered committee comprising some federal secretaries and me to resolve the issue. However, no progress has so far been made in this regard”.

The government is now trying for an out-of-court settlement with Karkey for minimal penalty payouts and considers that a government-to-government engagement could deliver the results.

The Turkish ship-based energy firm, Karkey Karadeniz Elektrik Uretim, was one of the 12 rental power companies that were awarded contracts by the Pakistan Peoples Party 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, although $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 the contract. 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 for 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 struck down the deal and insisted on recovering $120m from the Turkish firm. As a result, Karkey moved the 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 the ICSID.

NAB claimed that the Turkish firm had no power plant facility and it had only purchased the ship (on which the power plant was installed) through advance payment given by the power division.