ISLAMABAD: The Supreme Court has been urged to direct the secretaries of ministries of energy, water and power and others to stop making payments to the IPPs as it cannot be justified to be lawful within the framework of the Constitution, the Power Purchase Agreements, the Implementation Agreements, and other related agreements.

President Lahore High Court Bar Association and the Bar Association, on Monday, filed a petition under Article 184 (3) of the Constitution and cited the Federation through the Cabinet secretary, secretary Ministry of Water and Power, secretary Ministry of Energy, chairman WAPDA, the Central Power Purchasing Agency, and CEO/ Director NTDC as respondents.

The petitioners submitted that despite the constitutional guarantee to a dignified life, citizens across the country are suffering due to exorbitant electricity bills, unannounced and prolonged load shedding, and the overloading of transmission and distribution lines which has led to frequent forced outages.

President for resolution of IPP issue thru consensus

The situation is exacerbated by the inefficiencies and mismanagement within the power sector, which have not only compromised the quality of life but also burdened the citizens with unsustainable financial liabilities, they added.

The petitioners clarified that they do not seek to obstruct or cancel the performance of any contract which contain fair, reasonable and lawful terms and conditions and incentives offered to the investors, but seek a judicial review of the energy policies, the acts or lack of act of the respondents, and the contracts entered into by the respondents with the IPPs.

They submitted that as the problem of capacity payments, higher costs of inputs and fuels, which are environmentally unfriendly, payments to IPPs that are shut down and/ or are incapable of production having the effect of crippling the people and the businesses of Pakistan, all raise questions of public importance with reference to the enforcement of Fundamental Rights.

The petitioners requested the Supreme Court to declare the Power General Policy, 1994, issued by the government of Pakistan and all subsequent similar policies and extension, thereof, unconstitutional and opposed to public policy of Pakistan and strike them down to that extent.

They also asked to declare the Power Purchase Agreements, the Implementation Agreements and related agreements with the terms such as payment of capacity charges, guaranteed payments without performance of obligations of IPPs etc, signed by the respondents with the IPPs are one sided, unfair, unreasonable, unjustified, non-transparent, unlawful, un-Islamic, discriminatory, exploitative and void.

They also asked the Court to direct the respondents that each Power Purchase Agreements, Implementation Agreements and other related agreements be disclosed to the apex court and the petitioners, and each IPP be dealt with separately in the manner;

a. IPPs wholly or majority owned by the relevant respondents and/ or the State or State enterprises.

b. Power Purchase Agreements and Implementation Agreements; etc, with IPPs which are not capable of producing any electricity and not complying with their “performance” obligations under the agreements but are still being paid the capacity charges and guaranteed payments.

c. Power Purchase Agreements and Implementation Agreements with any foreign investors which have since divested their interests and IPPs are now owned solely by Pakistani investors and to determine whether there is any government guarantee/sovereign guarantee, which may no longer be valid and/ or is capable of modification or revoking.

d. Power Purchase Agreements and Implementation Agreements with foreign investors and companies, particularly those where any government/sovereign guarantee has been given and they are being paid unfair and unreasonable capacity charges and guaranteed payments and such agreements be further segregated on the aforesaid basis.

Copyright Business Recorder, 2024