Govt to pursue corruption charges against Karkey in rental power project.

LAHORE -- The government of Pakistan has decided to sever all efforts to reach an out of court settlement with the Turkish company Karkey on a $900 million award issued in favour of the company by the International Centre for Settlement of Investment Disputes (ICSID), after finding pressing evidence of corruption against the company.

The ICSID had earlier announced a decision in favour of the Turkish firm over a rental power project which was awarded to the company during the Pakistan Peoples' Party (PPP) government's tenure, which was later discontinued on the order of the Supreme Court of Pakistan. However, the decision by ICSID in favour of Karkey was later suspended.

Since then the government of Pakistan has found pressing evidence pertaining to corruption in acquiring the contract of the rental power project against the company. Moreover, official sources claim that since the discovery of the evidence, Pakistan is going to rigorously pursue the case at ICSID to get the decision reversed and turned in favour of Pakistan, with the approval of Prime Minister Imran Khan.

Pakistan has till July 26 to submit a reply and all the new evidence it has acquired. Moreover, officials state that confessional statements of former water and power secretary Shahid Rafi and two other officials would also be submitted to the tribunal as evidence of corruption in the procurement of the contract by the Turkish company.

Earlier this month, a delegation led by Attorney General for Pakistan (AGP) Anwar Mansoor Khan went abroad to negotiate for an out-of-court settlement with the company but remained unsuccessful.

However, after the recent developments, official sources have said that Pakistan will no longer opt for an out of court settlement and nor will it submit an offer to deposit $150 million (Rs23.55 billion) as a security payment to seek a stay in the enforcement of the $900 million award.

Earlier, ICSID had admitted an application of the government of Pakistan for revision of the award given in the Karkey Karadeniz case. This development took place in February and the tribunal for this case had also been reconstituted on February 7, according to the case details available on the ICSID website.

According to the timeline of events, Pakistan had filed a reply on the annulment of the award to Karkey on November 30 last year and a rejoinder in this regard was filed by the latter on February 5, 2019.

In a comment to Profit, Osama Malik, an Islamabad based...