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Power games

The issues of our power sector are complex, involving irregularities of various kinds. Another one of these became obvious on Wednesday as a Supreme Court bench hearing appeals filed by the Wapda labour union and Habibullah Energy declared the leasing by Wapda of the Lakhra Power Plant for 20 years to a private company as void. The bench declared that the leasing out of the power plant, with a capacity of 150MW, was carried out irregularly, with the transactions lacking in transparency. Other omissions were also detailed during the hearing of the case, with the apex court also stating that the Public Procurement Rules Authority had been violated. The SC’s decision will once again divide those who believe the apex court is going too far in its judicial activism and those who want the letter of the law followed strictly. Here are the facts of the case: in 2006, the lease for the power plant was granted to M/S Associated Power Generation Company despite the fact that it had not been among the original five bidders for the contract. This was done in contravention of all rules and regulations. Reportedly, the deal was rushed through by then prime minister Shaukat Aziz. Even the counsels for both Wapda and the private company admitted that the rules weren’t followed properly for the bidding process but still wanted the lease to be upheld on the grounds that it would undermine investor and business confidence if contracts were to be cancelled after so many years.

This is not a line of reasoning the Supreme Court should follow. The sale of national assets during the Musharraf era was scandalous, with prime assets being doled out to favoured companies at fire-sale prices. The SC had already demonstrated its willingness to root out corruption in such deals by declaring the Rental Power Projects illegal. Ultimately, this approach will prove more beneficial than the course advocated by those who want these shady deals to be upheld so that they don’t scare away potential future buyers. Our economy has been choked by those who seek shortcuts through bribery and influence, undermining the principles of competition and fairness. Since the government cannot be relied upon to police itself, the task falls to the judiciary. Only once we prove that we will not abide by deals that fall afoul of the law will we begin to attract much-need foreign investors. As the Lakhra Power Plant case has shown, even government agencies that should be working for the benefit of taxpayers end up defending such practices, leading the bench to observe that it seemed as if the counsel for Wapda was actually representing the private company. Perhaps the SC ruling in the matter will deliver a warning to all groups to act with greater caution and greater responsibility when entering into agreements. It is obviously vital that the rules laid down for such matters be adhered to and that we avoid the kind of underhand dealing that marked the leasing of Lakhra.

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