& çâÌæÚUæð´ ·¤è ¥ôÚU Îð¹Ùæ ÁæÚUè ÚU¹ð´ ¥ÍæüÌ ¥ÂÙð ÜÿØ ÂÚU ŠØæÙ ÚU¹ð´Ð ãæÚU Ù ×æÙð´, €UØô´ç·¤ ·¤æ× ·¤ÚUÙð âð ¥æÂ·¤ô ©gðàØ ·¤è Âýæç# ãôÌè ãñ ¥õÚU ÁèßÙ ·¤æ ¹æÜèÂÙ ÎêÚU ãôÌæ ãñÐ ÖÜð ãè ÁèßÙ ×ð´ ç·¤ÌÙè Öè ·¤çÆÙæ§ü €UØô´ Ù ¥æ°, çÁ™ææâæ ¥õÚU ©ˆâæã ÕÙæ° ÚU¹ð´Ð ŠØæÙ ÚU¹ð´, ÜÿØ ã×ðàææ ¥æÂ·Ô¤ Âæâ ãôÌð ãñ´ çÁ‹ãð´ ÂæÙð ·Ô¤ çÜ° ÂýØæâ ¥æÂ ·¤Öè Öè àæéM¤ ·¤ÚU â·¤Ìð ãñ´Ð

Move to pay shady RPC contractor Tk 300cr

Ministry now pushes for paying LIPPS ousted in 2005 for sabotaging power plant; RPC to fight back pressure

Sharier Khan
The Rural Power Company (RPC) in August 2005 cancelled a plant operation and maintenance contract with Lahmayer International Pally Power Services (LIPPS) as it illegally shut down and "sabotaged" two 70-megawatt units of a Mymensingh plant.
The RPC also filed several cases against officials including the LIPPS chief who fled from the country not only for sabotaging the plant but also for committing a host of serious financial corruption.
The corruption charges include attempts to take over the RPC management. Their corruption affected RPC so much that the German government had cancelled 70 million euro grant marked for two power projects.
The LIPPS chief, a retired army official, then turned to a Singapore arbitration court in late 2006.
By showing a yet-to-be-cffective contract for the third 70 MW unit of the Mymensingh plant, he won a verdict from that court which says RPC should pay LIPPS Tk 200 crore penalty for termination of the contract.
Delay in paying this compensation adds other penalties, the verdict says.
The RPC however obtained a stay order from the High Court against effectiveness of the verdict made in Singapore.
1\vo separate investigation committees looked into the matter and pinpointed a host of irregularities committed by the LIPPS chief and several high offi cials of RPC to milk out as much money as possible from RPC.
The committees recommended taking actions against the accused including the LIPPS chief.
However, the committees' recommendations were in vain as no action was taken till date.
As it was the affair of a limited company, except the Rural Electrification Board (REB) which owns some RPC shares, neither the power ministry nor any other government organs have any business or role in this regard.
Surprisingly, after four years the power ministry in May suddenly initiated a move to make RPC pay LIPPS the Tk 300 crore as per the Singapore verdict.
More intriguingly, the ministry made the move on receiving a report sent by a top intelligence agency in Bangladesh in April. Insiders say the intelligence agency does not own the report and It merely for warded a document that it had received.
This report from a mysteri ous source asks the ministry to form a three-member committee, pay compensation to LIPPS and patch up with it for another operation and maintenance (O&M) contract on Dhaka North Power Project (DNPP), which failed to launch, again becauseof LIPPS graft.
On May 24, the obliging ministry formed a three-member committee headed by a joint secretary to "resolve legal tangles" between LIPPS and RPC for the sake of imple-mentingDNPP
This committee in line with the report's suggestion is now trying to identify the "guilty" persons involved in financial bungling in RPC "after" the cancellation of operation and maintenance contracts with LIPPS from August 3,2005.
"This means the persons who tried to restore financial order in RPC after LIPPS was ousted are now being coloured as guilty," comments an RPC high official.
The three-member power ministry committee late last month interviewed the LIPPS chief as well as some RPC officials.
But the energy ministry high-ups are unaware of these developments. A top ministry source expressing his surprise says this is the business of neither intelligence agencies nor the ministry to deal with contracts of a company like RPC.
"The RPC is essentially a private company as its majority shares are held by the Pally Bidyut Samity. Such matters should be dealt with by the RPC board," he adds.
"The government is not liable to pay financial penalties of RPC and it's absolutely not the intelligence agency's job to poke its nose in such matters."
Well-placed sources say RPC is challenging this move by providing the ministry with documents and proof that the verdict Singapore arbitration court was "irrelevant" and that the contract with LIPPS was cancelled on "fair" ground.
"In 2007, RPC filed a case with a Dhaka court, which stayed implementation of the Singapore arbitration order. That stay is still in effect. We would now rather move that case and end this chapter," says an RPC top source.
"It was LIPPS that pushed RPC to lose the 70 million euro grant of the German government committed for the 450 megawatt Savar plant and the third phase Mymensingh power plant," he says.
He adds, "Now the ministry is trying to say that we should patch up with LIPPS and put them back for costly operation and maintenance again."
The report forwarded by the intelligence agency suggests restoring the RPC managing body of April 2005 which was dissolved by an order of the then prime minister.
The RPC is a company floated in 1994 by REB with 51 percent shares held by it and remaining by five solvent Pally Bidyut Samitys (PBS), which are also owned by REB.
By 2005, REB offloaded some shares to PBSs and reduced its direct ownership down to 40 percent shares.
Speaking anonymously, another RPC official says: "During 2002-2005, the LIPPS management enjoyed strong connection with Hawa Bhaban and was making RPC sign various unsolicited overpriced contracts.
"In 2005, with the help of some RPC board members the LIPPS chief tried to take over the RPC management by unilaterally offloading REB shares.
"This move prompted the government to intervene and dissolve that body and restore REB stakes in it."
The intelligence agency report claims all the five cases filed against the LIPPS officials have been "quashed”.
But RPC officials say the report is not based on facts. The LIPPS chief is still facing trial in a case against him for sabotaging the power plant with a Mymensingh court, they add
"The RPC has lost in some cases due to lack of attention and poor progress of its lawyers. We should have won the cases. Now we would take the best lawyers to fight against him." says a top official. ALLEGATIONS OF LIPPS CORRUPTION
The LIPPS was a local com-pany floated and majority shares held by its German parent company and its local agent - the retired captain -with 35 percent shares held by RPC.
But it is now entirely owned by the retired captain.
From the beginning LIPPS acted as RPC's "consultant". It literally controlled all RPC procurement decisions push ing it for various costly and unsolicited contracts till 2005.
For an example, the third phase 70 mw Mymensingh plant, built by Siemens on an unsolicited deal hammered by LIPPS, cost 120 million euros.
In contrast, the basic project cost of the AES Meghnaghat 450 mw plant cost 180 million dollars.
In 1999, LIPPS signed the first O&M contract for the Mymensingh phase-1 and 2. The RPC on June 6, 2004 signed a 25-year O&M contract worth Tk 1,000 crore with LIPPS for the Mymensingh 3rd unit power plant.
The RPC also signed with it a similar 25-year contract for the DNPP at the rate of Tk 28 crore payment per year.
Industry insiders had always pointed out that these contracts are five to six times costlier than O&M contracts for the Meghnaghat 450 mw plant.
"Both the 2004 contracts were signed deviating from a board decision of RPC. The board had decided that the Mymensingh phase 3 O&M contract would be tailored on the basis of a 1999 contract with LIPPS," the source says.
"The 1999 contract dictated Bangladesh laws as the governing law, but the 2004 contract replaced it with English laws," he adds.
This later contract made the scope for arbitration at a Singapore court.
Another unauthorised part in the contract is a line that says, "Before terminating the contract, the owner shall pay the operator euro 15 millions."
K.O S,'MW»J5lS8Ml ,9^ contract spells o,ut jSuch penalty on the owner for terminating a contract," the RPC source observes.
"Again both these clauses were used wrongfully at the Singapore court where the RPC representatives actually worked for LIPPS and remained silent. The court verdict was based on these two clauses when there was another clause that actually makes both these clauses invalid," he points out.
He goes on to explain, "The contract for Mymensingh has a clause saying till the 3rd phase plant is commissioned, the 1999 contract with LIPPS will remain effective and valid.
"The Singapore court gave the verdict in late 2006. But the 3rd phase plant was commissioned in July 2007. Therefore, the court gave verdict on the basis of a wrong agreement as the 2004 contract was not effective at that time."
The 1999 contract did not spell out penalty of 15 million euros for its termination. The 1999 contract also does not allow arbitration in Singapore as it holds Bangladesh laws as the governing law.
The LIPPS was ultimately ousted from RPC when it refused to let government officials enter the Mymensingh plant site in August 2005, preventing them from conducting an investigation.
Afterwards two investigation committees were formed comprising REB and RPC officials -- one in March 2006 and another in May 2006.
Both the committees categorically accused the LIPPS chief and some high officials of RPC for financial and contractual bungling. But no action was taken against them.
Following ouster of LIPPS, RPC looks after the Mymensingh plant with its own staffs. The LIPPS was being paid Tk 27 crore in 2004, whereas the same job is now being conducted by RPCL at the annua) cost of onlyTk 5.73 crore.
Contacted for his comment on these developments, Secretary of Power Division Abul Kalam Azad said he joined his position only a month ago and is not aware of all the developments In the ministry.
"I'll look into it," he said.
Adviser to the Prime Minister on Energy Dr Towfiq-c-EIahi Chowdhury, Bir Bikram also noted that he is looking into this matter.