SC nullifies Lakhra Power Plant lease agreement; orders govt to take legal action against responsible of irregularities in leasing

ISLAMABAD: Supreme Court of Pakistan has nullified the lease agreement of Lakhra Power Plant situated in Jamshoro District of Sindh and directed state to the state constitute an investigation committee to probe into the matter. Court has ordered the government to initiate civil and criminal proceedings against people involved into the non-transparent leasing agreement.

Court has said in its orders that the agreement between WAPDA and Associated Group was non transparent and PEPRA rules had been violated during the process.

A three-member bench comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Jawad S Khawaja and Justice Sheikh Azmat Saeed issued short order after three days long hearing of the case after six years long pending.

Court rule in verdict that “We have heard the learned counsel for the parties at length and have examined the pleadings/documents placed before us for ascertaining as to whether transaction between the parties i.e. the Lease for 20-years in respect of Lakhra Power Station GENCO-IV, dated 11.09.2006, followed by Power Purchase Agreement dated 15.12.2007 had been entered into in a transparent manner following the PEPRA Rules and allowing open opportunity to interested parties to participate in the competition for acquiring the said Leasehold Rights.

The court concluding hearing has said that the transaction noted herein above between M/s. Associated Group (AG) and the Water and Power Development Authority (WAPDA) is not sustainable being non-transparent and also suffers from irregularities, illegalities, omissions and commissions as well as violates the relevant Rules as well as precedents set-forth by the superior Courts.

While setting aside the transaction the court directed the Federal Government of Pakistan to conduct an inquiry/probe to fix the civil and criminal liability upon the persons/beneficiaries, etc in accordance with the law as a result of above conclusion.
Court said for the reasons to be recorded later, both the appeals are allowed with costs throughout.

During the course of hearing Miangul Hassan Aurangzeb appeared before the court on behalf of appellant Habibullah Energy Company, Waseem Sajjad represented Associated Group (AG) while Advocate Shahid Hamid appeared on behalf of Wapda.

Meanwhile, Additional Attorney General Shah Kahwar filed reply on behalf of Federation and Ministry of Water and Power. He Shah Khawar informed the court that former government violated the PEPRA rules while granting lease of Lakhra power station.

Shah Khawar stated that the process of pre-qualification was not adopted by than officials and they have compromised on merit.

Earlier, the Secretary Ministry of Water and Power Saifullah Chatha informed the court that incumbent government has postponed the privatization of Lakhra Power plant because the matter is before the court.

During the course of hearing Chief Justice remarked that people have not learned the lesson even court decision in rental power case is before them.

Earlier the counsel for Workers Association of Lakhra Power plant, Tariq Mehmood completed his arguments stating that both parties were in race of getting the contract but the power full party secured the lease contract.

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