Former PM Raja Pervaiz Ashraf Acquitted in Rental Power Projects Case

An accountability court in Islamabad on Tuesday acquitted former Prime Minister Raja Pervaiz Ashraf in several NAB (National Accountability Bureau) references pertaining to rental power projects.

Judge Ali Warraich, presiding over the accountability court, announced the verdict in three NAB references related to the Sharaqpur, Bhakki, and Karkey rental power ventures, acquitting Ashraf and various other individuals.

The Karkey Ship reference involved an estimated corruption of Rs22 billion. The Karkey company had also lodged a claim of Rs200 billion against the state of Pakistan. Nevertheless, the PPP leader, along with 11 others, have been cleared in this matter.

Separately, in the Sheikhupura reference concerning the Bhakki power plant, a project valued at Rs96 billion, the former chairman of Wapda and six others were also exonerated by the accountability court, along with those implicated in the Sharaqpur power reference.

It’s worth noting that this isn’t the first instance of the former premier being discharged from corruption references linked to rental power projects. He was previously acquitted in the Pira Ghaib rental power plant case in 2020.

Karkey Karadeniz Elektrik Uretin (KKEU) was among a dozen rental power entities awarded contracts by the PPP government during 2008-09 with the aim of resolving the energy shortage.

After failing to deliver the necessary electricity, the company appealed to the International Centre for Settlement of Investment Disputes (ICSID), resulting in a $1.2 billion penalty imposed on Pakistan in 2017. This matter has now been resolved through amicable means.

Due to the involvement of Turkish President Recep Tayyip Erdogan, the $1.20 billion penalty levied against Pakistan was rescinded.

The PPP government entered into an agreement with Turkey in 2009 to secure electricity, awarding contracts to nine RPP firms (both local and international).

The Pakistan Electric Power Company (Pepco), under the Ministry of Power and Water, formalized a $564.6 million agreement with the Turkish company, Karkey.

As part of this agreement, a rental power project was initiated in Karachi to provide 231 megawatts of electricity to PEPCO. However, the project was unsuccessful in achieving this, and the electricity proved to be costly, with the government incurring monthly payments of $9.4 million to the Turkish company.

The contract was backed by the government, prompting the Turkish company to approach the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) alleging a breach of contract.

In 2017, Pakistan lost the case and was instructed to pay approximately $780 million, along with a monthly interest of around $5.5 million.