ISLAMABAD - The Supreme Court Wednesday set aside the deal between M/s Associated Power Generation Company and Water and Power Development Authority (Wapda) regarding lease of Lakhra Power Plant for 20 years.
The court ruled: “The transaction is not sustainable being non-transparent, includes irregularities, illegalities, omissions and commissions and violates the relevant rules and precedents set forth by the superior courts.”
The court directed the federal government to conduct an inquiry to fix the civil and criminal liabilities upon the persons/beneficiaries, responsible for the deal, in accordance with the law.
Coal-fired power plant, based in Lakhra coalfield, Dadu district of Sindh, which has three units each with installed capacity of 50MW, was leased out to M/s Associated Power Generation Company for 20 years in 2006 without following the rules. The labour union of the plant and M/s Habibullah Energy, affected by the deal, moved the Sindh High Court, which gave decision in favour of Associated Group. After that the labour union and M/s Habibullah filed appeals against the SHC order in the Supreme Court which reversed the order with the cost they had borne throughout the proceedings.
A three-judge bench headed by Chief Justice Iftikhar Muhammad Chaudhry, after hearing the counsels for the parties at length and having examined pleading and documents placed before the court for ascertaining as to whether transaction entered upon for lease holds right, observed that the deal was struck in a non-transparent manner without following the Public Procurement Regulatory Authority (PPRA) rules and allowing open opportunities to the interested parties.
Additional Attorney General Shah Khawar, appearing on the court notice, prayed that the whole bidding process should be set aside and declared illegal. He said: “The whole process of lease of Lakhra Power Plant lacked transparency. “It was in clear violation of PPRA rules,” he added.
He said the government, subject to the Supreme Court decision of the case, wanted to revisit its strategy and would hold an inquiry against those responsible for the illegal deal.
Associated Group, which was not among the five companies in the first bidding process was given the lease of the plant for 20 years on the intervention of former President Pervez Musharraf and ex-PM Shaukat Aziz.
Shahid Hamid, counsel for Wapda, admitted that there was deviation from the rules for granting the lease of Lakhra Plant to Associated Group. He said, “Even though there have been deviations from the rules they merit to be ignored on the basis of the law laid by the apex court in SC 2010 SCMR 455 and PLD 2011 SC 619.”
He said Habib Energy was a losing bidder in response to its bid on21-07-2006, adding though there was no advertisement process, the losing bidder had an alternative remedy under Rule 48 of PPRA Rules 2004.
The chief justice told him that Wapda should have proved transparency in the transaction. "You have failed to make us understand how the Wapda endorsed such deal,” the CJP said. Justice Jawwad S Khawaja, a member of the bench, remarked, “You seemed to be the counsel for Associated Group and not for Wapda.”
Waseem Sajjad, representing the Associated Group, conceded that there was some deviation and also no advertisement was issued. He said, “As the country is facing the economic crisis, the judicial restraint in the case would be apt. Too much activism in the matter could be disastrous,” he added.
Justice Jawwad told him that the court would decide the matter in accordance with the law. The chief justice said they could not ignore the irregularities.
Earlier, the acting Ministry of Water and Power secretary informed the court that the ministry had withdrawn the summaries. The ministry moved a summary to the PM on July 17, 2013, for the privatisation of two Gencos, Muzaffargarh Thermal Power Station and Lakhra Power Plant (150 MW) and two Discos, Faisalabad Electric Supply Company (Fesco) and Islamabad Electric Supply Company (Iesco) while Prime Minister Nawaz Sharif approved the summary on July 27.