The PPP’s premier solar initiative is under scrutiny for alleged violations amounting to billions.

Significant inquiries have emerged concerning purported anomalies and lack of transparency in contracts associated with the Pakistan Peoples Party’s principal initiative, the Sindh Solar Energy Project (SSEP), as reported by The News on Sunday.

The initial phase of this project, financed by the World Bank with Rs28 billion, sought to deploy 200,000 solar residential systems. A foreign manufacturer declared the cost of each solar kit as $151; however, import records indicated that the true price was around $50.

The overseas company was additionally expected to import solar DC fans. Nevertheless, fans produced in Pakistan were disseminated by modifying import documentation, and duties and taxes were asserted based on purportedly fraudulent import documents.

Shahzad Iqbal, the anchor of Geo News’ program “Naya Pakistan,” and executive producer Syed Hassam Ahmed Warsi revealed significant information regarding the purported flaws in the SSEP for the first time.

In response to the investigative report during the broadcast, province minister Syed Nasir Hussain Shah asserted that no anomalies exist in the SSEP and that the pertinent records would be made available.

In response to the inquiry of whether the low price of the solar unit shown on the commercial invoice submitted to Customs by the company constitutes under-invoicing, Shah stated that if under-invoicing took place, it was perpetrated by the private company.

Concerning the importation of fans, he stated that if fraudulent documentation were fabricated to misrepresent imports, the Sindh government would initiate an investigation and expose the issue.

During his election campaign, PPP Chairman Bilawal Bhutto Zardari introduced the SSEP, pledging to deliver 300 units of complimentary power upon his election as prime minister.

The Sindh government has commenced the distribution of solar home systems to several eligible homes in Karachi and 30 districts of the province over the previous year.

During the initial phase of the Sindh government’s initiative, it is asserted that financing from the World Bank facilitated the installation of solar systems in around 200,000 residences. Nonetheless, substantial inquiries and objections over transparency and delays in this Rs28 billion project have emerged.

In response to inquiries posed by the Senate’s standing committee, led by Senator Saifullah Abro, an investigation commenced, revealing additional concerns regarding purported irregularities totaling billions of rupees, insufficient transparency in contracts, and modifications in documentary records.

In July, the Sindh government declared its intention to supply solar home systems to low-income off-grid homes or those consuming fewer than 100 units of electricity. The objective was established to supply solar systems to 200,000 households within one month.

The provincial government regards the SSEP as its premier effort. This initiative supplies solar home systems to homes enrolled in the Benazir Income Support Programme (BISP), comprising one solar panel, a battery, a DC fan, three LED lamps, and a mobile phone charging facility.

The authorities approximated the entire expense of a comprehensive solar home unit to be around $208, or approximately Rs55,000. The Sindh government has secured $100 million, around Rs28 billion, from the World Bank for this project, asserting that the World Bank is overseeing its monitoring.

Nonetheless, inquiries and complaints pertaining to the project persist. In May, at a meeting of the Senate’s Standing Committee on Economic Affairs, presided over by Senator Abro, concerns were expressed over the opacity in the allocation of solar systems and the postponements in project execution.

On June 23, the Sindh Energy Department spoke with project director Mahfooz Ahmed Qazi, directing seven officers of the SSEP to appear before the inquiry committee; however, no outcomes from this probe have been disclosed to the public thus far.

“Naya Pakistan” reached out to Qazi for his perspective; however, he declined to make any on-the-record statements or disclose his views owing to his governmental employment.

Although the Senate committee expressed concerns about delays in project completion, the involvement of NGOs, and the distribution under the BISP, the matter extends beyond mere project delays or insufficient openness in solar system distribution.

The disclosures and papers disclosed during “Naya Pakistan” suggest that the issue is considerably more grave. The Sindh government asserts that Phase 1 of this project will involve the distribution of 200,000 solar home systems to the public, each priced at $151.31.

Including $56.3 in taxes, the total is nearly $208, or Rs55,000, per unit. A loan has been acquired from the World Bank for this project, which will ultimately be repaid by the public.

Documentary evidence from “Naya Pakistan” suggests that the true cost of the solar systems supplied by the Sindh government is purportedly far lower than $151, indicating that the funds borrowed from the World Bank surpass the actual expense of the solar kits.

A private company provided the Sindh government with a quotation of $112.44 per unit for the solar home system, according per papers acquired by “Naya Pakistan”.

The total, inclusive of taxes and tariffs, is $151.79, encompassing a controller, battery, LED light, LED cable, PV cable, mounting framework, and a USB cable for mobile charging.

Nevertheless, the commercial invoice from the same provider, accessible through “Naya Pakistan,” indicates that the quoted price for this solar home system is significantly below $112.

This document states that on October 24, 2024, the corporation imported 20,808 solar home system kits, with a unit price of $23.4, significantly lower than the original price of $112, about five times less.

The bill of entry document from the private company indicates that the foreign entity exported 20,808 kits to a local company in Pakistan at a unit price of $23.4.

Consequently, the inquiry emerges regarding the substantial disparity between the real cost of a solar kit purchased from China and the projected price. In this context, “Naya Pakistan” endeavored to reach out to the international corporation to ascertain its stance; but, despite multiple attempts, the foreign company failed to respond.

The Sindh government asserted that an imported solar DC fan will be included with this solar kit. Nonetheless, the records associated with “Naya Pakistan” reveal that the fans supplied to the public were not imported but procured domestically in Pakistan.

It is believed that counterfeit documentation were fabricated to indicate the importation of these fans, enabling the Sindh government to subsequently assert false duties and taxes.

The documents included in the program indicate that the import of solar DC fans is referenced in column No. 42 of the Customs bill of entry document. The international corporation exported 25,300 fans to its Pakistani agent at a unit price of $23.50.

Notably, the company’s website states that the fans being distributed are produced in Pakistan and exported to international markets. This prompts an inquiry into the existence of an import document for fans manufactured in Pakistan, as they were not sourced from China.

Our sources indicate that the disparity arises from the paperwork being fraudulent, as there exist two bills of entry for the identical machine number.

The machine number for the imported fans is documented as KPPI-HC-32166. Nonetheless, there exists an additional bill of entry for the identical machine number, which enumerates the importation of lithium batteries. This was purportedly executed to get Customs duties and taxes from the government, predicated on fake import documentation for the DC fans.

Furthermore, a document from the Customs clearance agency was shown in the episode, which references the claim for Customs duty and excise about the importation of solar DC fans, despite the fact that these solar DC fans were never imported.

The corporation asserted Customs duties and taxes based on this document. It is said that, based on the fraudulent bill of entry, claims were submitted for about Rs127 million, predicated on $18 in charges and taxes for 25,300 fans.

Moreover, the Sindh government contracted with the foreign business at a rate of $151 per unit, exclusive of customs and taxes, as per the company’s proposal. A loan was obtained from the WB pursuant to this contract.

According to the records, the business awarded the contract exported the solar home systems for a unit price of $23.4. The import value of the fans was indicated as $23.5.

The overall worth of the solar kit was under $50, while the Sindh government engaged a foreign company at a cost of $151, indicating that the total expense for 200,000 solar kits, excluding tariffs and taxes, was almost Rs8.5 billion.

The entire project cost, excluding tariffs and taxes, reaches Rs9.5 billion when including in the approximately Rs1 billion allocated to NGOs for the distribution of solar home systems.

Consequently, the inquiry emerges: what accounts for the substantial disparity between the price asserted by the Sindh government and the $100 per unit variance in the import documentation?

Consequently, in Phase 1, a $100 discrepancy for 200,000 solar units totals Rs5.6 billion. Likewise, if fraudulent duties are asserted for 200,000 fans, it totals over Rs1 billion.

A mismatch of Rs6.5 billion has arisen in the project. This prompts an inquiry into the significant disparity between the projected cost of the project and the actual expenditure.

During the second phase of this project, additional anomalies and concerns pertaining to a deficiency of transparency in the contract are emerging.

Transparency International Pakistan (TIP) has issued another letter to Sindh Chief Minister Syed Murad Ali Shah, emphasizing significant breaches of the Sindh Public Procurement Rules in the allocation of the SSEP contract, along with grievances concerning the procurement of solar units at exorbitant prices.

The letter indicates that complaints submitted to TIP assert that the Sindh cabinet sanctioned a deal directly with a subsidiary of a government entity, so violating the Sindh Public Procurement Rules.

Subsequent to the contract award, the government entity unilaterally amended the agreement to incorporate an additional subsidiary, notwithstanding the contract’s explicit prohibition against any transfer, in whole or in part, to third parties.

The letter indicates that the price of one purchased unit was artificially raised to $135, although the market price is $84 per unit. This supplementary expense has incurred a deficit of around $21 million or Rs6 billion. The letter advises the Chief Minister to examine the issue.