cellcard cellcard

Imran Khan anti-graft drive hits glass ceiling

Shishir Gupta / HINDUSTAN TIMES Share:
AFP

Imran Khan is not new to taking embarrassing U-turns on the diktat of his mentors. His hopes of scoring a diplomatic coup were dashed late last year when he was made to cancel his participation at the Kuala Lumpur Summit in view of Riyadh and Abu Dhabi’s sensitivities.

Imran Khan’s U-turn and the deafening silence of the media tells a sordid tale of how the deep state uses fear as an instrument of coercion to manipulate the public discourse or. in this case, make it disappear altogether. For those who remember the memorable courtroom scene from the Tom Cruise blockbuster, A few good men, in which Jack Nicholson, in a moment of extreme provocation, exclaims “you can’t handle the truth”, the situation in Pakistan today is a grim reminder of the opacity with which the deep state operates to protect its interests.

Even Imran Khan, the poster boy of the establishment, didn’t realise how deeply vested the interests of the army are in the matters of the state when he decided to move his crusade against corruption to the next level by going after entrenched businesses. The initial euphoria around the leaked report on the modus operandi of the independent power producers in April suddenly evaporated even as the government and the  National Accountability Bureau  (NAB) continued to relentlessly hound the opposition and some of its own allies on the sugar and other scams. What was different about the power sector scam that the government was forced to suppress the report? The suppression of the power sector report also reeks of a similar intervention. After all, the report had unambiguously exposed the extreme profiteering built into the contracts with the Independent Power Producer (IPP).

Commenting on the two specific projects, Sahiwal and Port Qasim coal plants, the IPP report revealed that “excess set-up cost of Rs 32.46 billion (about $430 million) was allowed to the two coal-based plants because of misrepresentation by sponsors regarding Interest During Construction (IDC) as well as non-consideration of earlier completion of plants…”. IDC was allowed for 48 months whereas the plants were completed within 27-29 months leading to entitlement of an excess Return on Equity (RoE) of $ 2.7 million annually over the entire project life of 30 years in the case of the Sahiwal plant, also known as HSR. The estimated excess payment keeping in mind a 6 percent annual rupee depreciation against the dollar works out to a whopping Rs 291.04 billion. The report further revealed the underhand nature of HSR’s financial misrepresentations by brazenly claiming IDC based on the markup on long term loans at the London InterBank Offered Rate, the benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loan, + 4.5 percent during the entire construction period despite the main company not borrowing any funds during the first year of construction and only short-term loans at substantially lower interest rates during the second year. The proceeds of profiteering are way too large for the common mind to have been missed as oversight. The complicity of government authorities in negotiating such profitable deals is the unwritten corollary to the report.

For just two projects that were examined, the report found overpayment of about $3 billion. Official acknowledgement of the IPP report would have opened a Pandora’s box. The public would have demanded similar auditing of other projects estimated at nearly $62 billion. People can perhaps handle the truth about corruption in high places. What they may not be able to handle is paying to shield “friends”.

 

First published in HINDUSTAN TIMES.

Related Posts

Previous Article

It is time for redefining global order

Next Article

China-EU summit to offer certainty in uncertain time