ISLAMABAD: A government decision to opt for the sale of an inefficient power plant has irked the Supreme Court bench seized with a dispute over the grant of 20-year lease of the 150MW coal-fired Lakhra power plant in Jamshoro, Sindh, to a private company.
A three-judge bench headed by Chief Justice Iftikhar Muhammad Chaudhry expressed dismay on Tuesday over the government decision to privatise the power plant although the matter was sub judice before it and the court had already asked in a previous hearing for maintaining a status quo in the matter.
The court had taken up an appeal by Habibullah Energy Limited (HEL) against the Sindh High Court’s Dec 2007 order of handing over the Lakhra power plant to the Associated Power Generation Group.
The 150MW plant set up in 1995 is situated in Khanote village on the right bank of the Indus, about 50km from Hyderabad. It comprises three units of 50MW each. It was designed on the fluidised bed combustion technology introduced in Pakistan by the Chinese using indigenous lignite coal as fuel.
Advocate Hassan Aurangzeb, representing HEL, drew the court’s attention to the government’s decision to go for privatisation of a number of power plants. He said he had been informed by the counsel representing the Privatisation Commission that Prime Minister Nawaz Sharif had on July 26 endorsed an opinion of Finance Minister Ishaq Dar to privatise a number of units, including the Lakhra power plant.
Advocate Shahid Hamid, who is appearing on behalf of the Wapda chairman, said he had no knowledge of the prime minister’s decision to privatise the Lakhra plant, adding that the news in fact had come as a surprise to him.
The court summoned Water and Power Secretary Saifullah Chattha and confronted Additional Advocate General Shahkhawar, representing the government, with the information.
Mr Shahkhawar informed the court that he had contacted Mr Chattha on Monday for soliciting fresh instructions on the matter, but the secretary did not say anything about the development except that he would contact the minister and the Wapda chairman and then get back to him.
Mr Chattha confirmed that the decision had been taken and he had submitted summaries. But he conceded that the information had not been shared with the AAG or the counsel for Wapda chairman.
Justice Sheikh Azmat Saeed, a member of the bench, regretted that the secretary was playing a typical game of ‘yes minister’ and since he had been unhappy with the decision, he wanted filibuster through the AAG before the court by not passing on the instructions.
Justice Jawwad S. Khawaja wondered whether the court should trust the AAG in future as he was not being given importance and his position was embarrassed by the government functionaries – a development which the judge described as ‘criminal’.
The chief justice said the apex court had always gone extra mile in protecting bureaucrats because “we know the government is always run by them and in the words of Quaid-i-Azam they are steel frame of the state”.
The court ordered the secretary to submit a written explanation on Wednesday.
In December 2005, then prime minister Shaukat Aziz had directed Wapda to complete rehabilitation and increase capacity of the Lakhra plant.
In its petition, HEL said the Lakhra power plant had surreptitiously been given to the Associated Power Generation Group with a mala fide motive after allowing it to match the bid even before the actual consideration of bids. The entire bidding process was a complete farce and a fraud on the law, it said.
According to a note submitted by Secretary Saifullah Chattha to the prime minister, power plants, including Thermal Power Station (TPS) in Muzaffargarh (GENCO-III) and Lakhra (GENCO-IV), have deteriorated and lost considerable operating efficiencies. Since the generation authorities could not timely respond to the call for their proper maintenance and rehabilitation, the plants have been incurring heavy operational costs.
The note regretted that the Muzaffargarh Thermal Power Station was running at 900MW while its installed capacity was 1,350MW. The Lakhra power plant has an installed capacity of 150MW but only one unit with a de-rated capacity of 30MW is under operation. The remaining two units of 50MW each will require complete revamping and rehabilitation for their operation which may require considerable investment.
As per the policy of the government and to introduce efficiency in public-owned entities, the note proposed to privatise two generation companies and two distribution companies -- Faisalabad Electric Supply Company and Islamabad Electric Supply Company. Later acting chairman of the National Electric Power Regulatory Authority submitted to the court calculated price of bids offered by HEL and Associated Power Generation Group.