ISLAMABAD: Pakistan has reportedly agreed to pay upto $ 165 million to Turkish company M/s Karkey Karaddeniz Electric Uretim for out of court settlement and wind up the case in National Accountability Bureau (NAB), well-informed sources told Business Recorder on Tuesday.
On Monday night, Prime Minister, Imran Khan, in a tweet, claimed that PTI government with the help of President Recep Tayyip Erdogan has amicably resolved the M/s Karkey dispute and saved $ 1.2 billion penalty imposed by ICSID on the government. However, this correspondent tried to get details from several official sources however no one was willing to discuss the deal struck. Hammad Azhar, Minister for Economic Affairs, in his press conference however stated that Omer Ayub is currently out of the country and will provide details on his return.
A committee comprising Joint Secretary (Power Finance) Zargham Eshaq Khan, two senior officers of Inter Services Intelligence (ISI) and an officer from Attorney General’s Office, constituted by the then Prime Minister Nawaz Sharif made more than ten visits to Turkey to meet the officials of M/s Karkey Karaddeniz Electric Uretim, wherein the company’s officials were shown documents which proved that kickbacks were involved in the contract.
According to sources, last month hectic activities were witnessed in the Power Division with respect to the deal with Turkish M/s Karkey. The Minister for Power, Omar Ayub Khan and Secretary Power, Irfan Ali did not attend the inauguration ceremony of Hubco’s coal-fired power plant due reportedly to an important meeting on the deal with M/s Karkey.
Zargham Eshaq Khan is being portrayed as the key architect of the deal with Karkey Karaddeniz Electric Uretim and preparing “official” approvers whose confessional statements were shared with the Turkish company and Turkish government.
National Accountability Bureau (NAB) also arrested a ’front man’, Laeeq Ahmed Sheikh, during investigation for ‘corrupt’ practices and misuse of authority in the award of RPP’s contract to M/s Karkey, in addition to former Secretary Water and Power, Shahid Rafi and Former CEO of Lakhra Power Generation Company Limited (LPGCL) Anwar Brohi.
NAB had claimed that $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. However, this information cannot be presented before the international court as evidence. Pakistan had also hired a Swiss firm against payment of a heavy fee for the arrest of Laeeq Ahmed Sheikh to be used as leverage to get a “deal”.
The then Prime Minister Shahid Khaqan Abbasi had also approved about $35 million for an out-of-court settlement but the then government delayed it saying “it will look into it” but did nothing. M/s Karkey had set up a 332 ship-mounted Rental Power Project (RPP) at Port Qasim, Karachi, pursuant to Rental Power Policy 2008, announced by the then government of Pakistan (GoP). M/s Karkey entered into Rental Services Contract (RSC) on April 23, 2009 for generation of electric power with the Lakhra Power Generation Company Limited (LPGCL). Pursuant to the terms of the RSC, the GoP issued a sovereign guarantee to secure payment obligations of LPGCL and Karkey achieved commercial operations in April 2011. In the meanwhile, the Supreme Court in exercise of its original jurisdiction initiated suo motu proceedings against RPPs and through its detailed judgment of March 30, 2012, declared all RSCs void ab initio, being illegal and against public policy. The Supreme Court also directed National Accountability Bureau (NAB) to carry out an investigation under the NAB Ordinance 1999.
On August 22, 2018, the ICSID awarded against GoP an amount of $ 760 million along with interest thereupon. After the award, Karkey went into enforcement of arbitration award against Pakistan in various jurisdictions including the US, the UK, Germany and France. The sources said M/s Karkey will submit papers in ICSID showing that it has struck a deal with Lakhra Power Generation Company Limited (LPGCL), requesting to withdraw the case. The Turkish firm, sources said, has also being given a guarantee in writing that GoP or NAB will not take any further action against the company or its representatives in Pakistan.—MUSHTAQ GHUMMAN
