Pakistan the new frontier in the great wind power fraud

Pakistan home

Electric light sounds great – just tell me again, how
much does it cost when it comes from giant fans?

With the wind scam pulled to a grinding halt in Australia – and European wind weasels under threat as Europe gets set to pull the plug on the fat pile of subsidies that provide them with essential, life giving nourishment there – it seems that their next targets are the very poorest and most corrupt countries on the map.

Funny about that.

Wind power: that’s another scam brewing up
Business Recorder
14 October 2013

Although it is not known whether or not the government is seeking to steer clear of different brewing scams in various economic areas, it is quite clear that it has in fact encouraged a fraudulent scheme in wind power energy sector to swindle the national exchequer. According to sources, the ‘Letter of Intent (LoI)’ game, which is strongly characterised by conceit, deceit and intrigues, has become a convenient tool to inflict huge financial losses on nation’s kitty for the benefit of a few individuals.

Inquiries carried out by Business Recorder in the country and as well as abroad show how a wind power project works: an LoI is given by Government of Pakistan for interested parties to setup a wind project. Once the LoI is arranged, back door deals allow for some of the projects to get government land to the projects at few rupees per acre (cents per acre). Currently over 100 LoI are given whereas some 20-25 projects have been allocated government land. Only a couple of projects have acquired their own land.

“Once the land is available, a technical feasibility is done which involves 5 individual studies and total cost for doing these plus setting up the wind measurement equipment plus legal and Technical consultant comes to half million ($500,000) dollars and this is the total cost for the sponsor,” the sources said.

The following is a typical breakdown of a wind project in Pakistan, according to sources:

Construction Contract or EPC (Engineering Procurement and Construction – ‘turnkey’ project) is a buzzword in energy circles these days.

EPC Contract involves procurement of Energy Equipment (wind turbines), setting it up on Site then commissioning of the project. Individually turbines cost around $47-$50 million, civil costs are around $8-$9 million and another $8 million are for setting up the electrical substation and transmission lines inside the site. These add up to $63-$67 million. EPC contractors charge another few million to cover their risks but the total Final “fully loaded” EPC cost should come to around $75 million.

However, as shown in the Table 1, the projects show their total EPC cost as $105-$111 million. The difference between the actual cost and the submitted cost is typically recouped. Project Company and the EPC contractor have a Contract that is submitted to the regulators and bankers and creditors that shows the amount shown in the Table 1.

However, there is a second contract – a typical side letter arrangement that provides the split of the recoup back to the Project Company and tech contractor, the sources added.

As EPC companies are part of the structure they realize that project company is taking cash out into their pockets, they ask for higher prices to $85-$95 million dollars (depending on the negotiations and allocation of risks) to share in the loot, the sources said and added that all international companies have local partners that help set up the arrangement.

Table 1 – submitted fictitious contract

=======================================

EPC Cost                                            111,300,000

Non-EPC Cost                                        1,855,000

Project Development Cost                  3,930,000

Land Cost                                                  103,389

Taxes and Custom Duty                         715,700

Insurance During Construction         1,502,550

Financing Costs                                    3,106,112

IDC                                                          9,602,871

=======================================

Total Project Cost                            132,115,622

=======================================

Table 2 – the real contract

=======================================

EPC Cost                                           80,000,000

Non-EPC Cost                                        500,000

Project Development Cost                  900,000

Land Cost                                               100,000

Taxes and Custom Duty                       715,000

Insurance During Construction       1,500,000

Financing Costs                                  3,000,000

IDC                                                       9,000,000

=======================================

Total Project Cost                            85,715,000

=======================================

According UAE and foreign-based sources, people in Pakistan are bribing their way, violating US foreign corrupt practices Act often involving bribes to regulators, government officials and bankers. They are not putting any equity in the company, on the contrary taking money out at the time of financing approval ($132-$85 million, which is fifty percent over the total project cost). Another way they hit the projects viability is shorting on the needed spare parts and other risks are left alone to be borne by the lender they also hire their own cronies and relatives at high salaries to show as project development costs. Prospective investors say that this is beginning to ruin the renewable market in Pakistan and the goodwill of the US Government who is trying to help the people of Pakistan is laid waste by the greed and corruption of a few individuals.

An average person in Pakistan thinks that corrupt rich are getting richer while their lives have not seen any change, according to the sources.
Business Recorder

Remember a few months back when struggling Danish fan maker, Vestas turned up and told Aussies that we should only “act on FACTS“?

Apparently, that sanctimonious little adage has no application when it comes to cooking up false figures and bogus contracts.  On the Vesta’s world view, that’s just part and parcel of a “clean, green” future, right?

Call us old fashioned, but STT struggles to see how wind power can be characterised as anything other than the greatest environmental and economic fraud of all time.

enron-scandal

Wind power fraud was just the icing on the cake.

The hucksters that profit from it, are clearly a breed apart – sharp and low, in equal measure.

The saddest part is that the gullible and ignorant see the rush to stick up giant fans as the only way to “save” the Planet and close their eyes and ears to all of the REAL FACTS.

A few years from now – when the whole thing grinds to a screaming halt and the dust begins to settle, we’ll all wake up – as if from a very bad dream – and ask: “was it not real?”

John-Cleese

Oh my God, I’ve just had the most horrible dream.
Energy policy had been hijacked by a bunch of crooked spivs.
There were blackouts every other day and we couldn’t pay the power bill.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. This is how the wind industry suppose things are to be done. You are right, they just care about their money.

  2. Jackie Rovenksy says:

    What’s being missed in this whole saga is – where is all the research being conducted into finding a way to clean the existing emissions from the air?
    Of course nature had its own solution, but rather than work with that and enhance it we are destroying the very things which clean the air.
    Forests and peat bog areas are two of nature’s cleansers, but they are being destroyed to install machinery which has been proven not to be environmentally friendly. Machinery constructed from components which are produced in intensive emission producing factories. Even the foundations used to install this machinery are constructed from a well-recognised environmentally unfriendly product – concrete.
    Skim the surface of the ‘green and clean’ argument and you see the depths this industry will go to in order to ensure they keep filling their pockets. Smug, stupid, arrogant, greedy as well as naïve people are sought out by these companies to do their dirty work in communities to ensure the avarice of the companies motives are made to appear noble and altruistic.

  3. Reblogged this on Mothers Against Wind Turbines and commented:
    They don’t care who they rob….they just want your money!!!

  4. Be it palm oil green energy schemes that destroy millions of hectares of forest in Borneo and Sumatra in the process of diverting millions of dollars to Indonesia’s “white shoe brigade”, or whether it’s the “free money” flowing from Australia’s RET fraud for “giant fans” it’s really much the same. In third world countries the poor people are brought closer to starvation, while in Australia, once prosperous farmers have their health destroyed, their houses rendered uninhabitable, their businesses destroyed and their property values halved.

    But never mind it’s all in the interests of saving the planet. Or is it, in fact neither of these tokenistic “industries” could make one jot of difference to “global warming” irrespective of whether one subscribes the dangerous man-made warming orthodoxy or not. Palm oil for bio-diesel is an oxymoron, just as is corn or cane ethanol. Even if the planet’s entire arable land area were to be turned to bio-fuel production, we would not even come remotely close to being able to supply the world’s needs for transport fuels. Not to mention the inevitable quid-pro quo, there would be no crops for food!

    No, if there were any GHG climate emergency the only, repeat only, base load power source that could make the slightest difference to emissions of that essential trace gas CO2 would be Ziggy’s preferred option i.e. nuclear.

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