Mansha named in Rs 15 b Nandipur scam Mian Mohammad Mansha, one of the richest persons in Pakistan, keeps coming in limelight for his increased association with the Sharif family and dubious business deals, the latest being a Rs 15 billion Nandipur scam. Mansha was always known for his reserve and discretion in all things political. But he has somehow chosen to become more overt in his dealing with politicians. He is shown sitting in energy meetings headed by the Prime Minister. The government came under criticism for a possible conflict of interest as he was one of the biggest energy players in the country. It was odd that he was advising the government on the IPP case where he was a beneficiary. His companies are one of the major recipients of the recent funds given by the government to settle circular debts. The media is now abuzz about Punjab Chief Minister Shahbaz Sharif travelling in his plane. Mansha 3earlier took Shahbaz on a tour if his facilities, an event that was also publicized on the official media. As if all this was not enough, the latest issue over the payments to Nandipur power project has brought him in further inspection. Media has covered the issue but without naming Mansha in their reports, which shows his hold over the media, particularly Jang Group. In a letter sent to the chief justice of Pakistan, former Pepco MD Mr Baseer has accused the government of overpaying Mansha by at least $ 149 million. He alleges that the PML-N government has revived the 425 MW project with a monumental increase in the cost revised upwards to $570million from $329 million. “The revised PC-1 of the Nandipur power project is a well thought out, well conceived and white collar scam to cheat the public exchequer of $149 million, the benefit of which will go to a select private sector party.” He claims that the equipment and machinery, which is at the site or at the port, was already paid for. The only increase demanded by the Dongfong Electric Corporation (DEC) is $40 million. And there could be an increase in extended insurance for 2-3 years, plus IDC. This could add up to say another $25 million at the most, bringing the cost to $425 million plus $25m which equals $450 million, certainly not $574 million. This means that the hefty amount of $124 million is still unjustified and unaccounted for. Baseer says the project was delayed because of the PPP government but the machinery was already here and there is no question of its rusting which may need compensation. They just need to install the machinery at the site and make the project operational. Mr Baseer says in his petition that : i) Provisional Letter of Intent (LOI) issued by MD Pepco and accepted by DEC on 3 December,2007. Discounted EPC cost agreed with DEC was $329 million. ii) Total Project Cost estimated at $385 million to include Insurance, Interest During Construction (IDC), and miscellaneous civil works (costing sheet attached, Annexure B). iii) Project levelised Tariff for 25 years was 10.821 cts /kwh vs. equivalent IPPs (Atlas, Nishat Power, Nishat Chunian etc.) at about 12.125 cts /kwh. Net Tariff lower by 1.304 cts /kwh at FO cost of Rs25,597/ton in December 2007. iv) Nandipur 425 MW Power Project is the lowest cost project as even compared to IPPs set-up in 1995 – 1998 under PPP government. (news report attached, Annexure C) v) Full contract was signed in January 2008 by Mr Munawar B Ahmad, MD Pepco & Mr Loa Zhigung President DEC, for agreed EPC cost of $329 million. vi) Financing arranged by Pepco through Co-FACE (French credit), Sino Sure (Chinese), and BOP (Rupees) under overall Syndicate headed by BNP Paribas (French Bank). vii) DEC mobilization and construction started in October 2008. GE Turbines delivered and installed at site and paid for under financing arrangements. viii) HRSG; Heat Recovery Steam Generator Steam Turbine, Balance of plant equipment shipped by DEC in seven (7) batches and paid for, and now still lying uncleared at KPT/PQA port since August 2010. ix) The Chinese Contractor, DEC on August 20 wrote to Yusuf Raza Gilani (letter attached, Annexure D) requesting the GOP’s assistance in issuance of Ministry of Law legal opinion and release of shipment and balance payments. x) There was apparently no response from PM’s Secretariat or Ministry of Law. Even the Chinese Ambassador wrote to the Prime Minister, Pepco etc, but no affirmative action was taken. xi) Finally in September 2012, DEC was forced to de-mobilize its crew of about 400 construction and engineering workers and issued letter of contract cancellation. xii) For past 2 years and 10 months, a simple matter of issuance of a legal opinion by Ministry of Law, re-affirming that the GOP Sovereign Guarantee for the overseas loans (Co-Face and Sino Sure) was valid has not been issued. xiii) The PPP government clearly and intentionally delayed the matter and issuance of the Ministry of Law letters for want of commission by the concerned. Even when the then Minister of Water & Power, Raja Pervaiz Ashraf was approached on the matter he maintained that there was nothing he could do on the matter. xiv) The position now is that nearly 100% of plant, machinery and equipment has been shipped and paid for under the financing arrangements, and is either at the Nandipur site or the KPT/PQA ports. xv) About 50% work at site, including installation of three brand new GE Frame nine (9) turbines has been completed. Balance work, after delivery of equipment from port and re-mobilisation of the Chinese Contractor, DEC, can be completed within one (1) year. xvi) DEC has only demanded an extra $40 million for re-mobilisation, and increase in construction costs. This would result in the project cost escalating to $425 million or thereof. (news report attached, Annexure F). xvii) However a new mafia is at work now, and many reports, project escalation estimates have been spread in the media, stating that the project has escalated to an astounding $574 million (news reports attached, Annexure G). xviii) The question is where did this extra cost of about $149 million come from? There are also reports of plans by PML-N to privatise the Nandipur Power Plant and let the “Chosen” party arrange for the “extra costs”. Since a new revised cost has been “approved” by the ECC. xix) The revised PC-1 by Pepco/Ministry of Water & Power for Rs57 billion ($570 million) is under a well thought out scam to cheat the public exchequer of $149 million, the benefit of which will go to a “select private sector party” xx) The reality is that all equipment, machinery etc is at site or at the port and is paid for. The only increase demanded by DEC is $40 million. Plus there could be an increase in extended insurance for 2-3 years, plus IDC. This could add up to say another $25 million at the most, bringing the cost to $425 m + $25m = $450 million, certainly not $574 million. xxi) The Honorable Supreme Court may take notice of this new scam of defrauding the People of Pakistan by a hefty $124 million under a well conceived, white collar scam, which has indications of being the “Mother of all Scams”
Posted on: Wed, 17 Jul 2013 06:49:28 +0000
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