The Supreme Court expressed dismay over non-cooperation by State Bank of Pakistan (SBP) in investment of funds collected for the construction of Diamer-Bhasha and Mohmand Dams. A five-member bench, headed by Justice Sheikh Azmat Saeed, heard the case regarding implementation of the Supreme Court's directives to the Water and Power Development Authority (WAPDA), Federal Board of Revenue (FBR), State Bank of Pakistan (SBP), and Pakistan Electronic Media Regulatory Authority (PEMRA) regarding dams' construction.
"The SBP is not cooperating with us [SC], which is not acceptable," said Justice Azmat and ordered the governor SBP to file the report about it. Earlier, one of the executive directors informed the court that money collected for dams will be invested in the treasury bond of a three-month tenor as the profit of it is high i.e. 10.5%. Justice Azmat questioned why the money could not be invested in Sukuk Bonds, National Saving Certificates, Wapda Bonds or other profitable schemes. He told the bank official, "The implementation bench would decide where the funds be invested, while you have to give various options."
The Supreme Court on January 9, 2019 had constituted a special committee comprising two directors of the State Bank of Pakistan (SBP) and an official of the Supreme Court to look after the affairs related to Dams' fund and the investment of amount collected for the project. It also formed an implementation bench for the supervision of the developments on the dams' construction.
Chairman PEMRA Saleem Baig stated that in accordance with the licence rules, every TV channel is bound to air 10% of total airing time for public interest message, therefore advertisements run for the construction of dams did not require making payment to any TV channel.
Chairman FBR Jehanzeb Khan said that Re 1 per liter on water bottling and beverage industry will go to the Provincial Consolidated Funds of each province, while the amounts collected from mobile phone bills, which the court had suspended on October 16, 2018, can be collected as levy and made part of the donations towards the Dams Fund and other water management but a legislation is required for such purposes.
Dr Parvez Hassan, who was appointed as amicus curiae, submitted a report on the directives of the apex court. He stated that the Supreme Court's orders including a direction that the donations to the Fund shall be exempt from (1) tax including on withholding deductions and (2) scrutiny. These are areas of legislative and executive actions and should be respected.
He proposed that it would be best to move forward with the Fund with the support of the legislature and the executive and where the law clearly provides for legislative and executive actions and the process thereof, these should be followed with minimalist judicial intervention.
Regarding Supreme Court jurisdiction under the Article 184(3) of Constitution to take up issue of dams' construction, he submitted that in practice the courts do not consider it appropriate to take cognisance of a matter which is pending before the Supreme Court.
He stated: "We have not found any precedent on the establishment of a fund such as the Dams Fund in this present case by any judiciary under the analogous provisions of Public Accounts Fund in other national jurisdictions. Some constitutions specifically provide for a 'Contingency Fund' but Pakistan Constitution provides for only a Consolidated Fund and a Public Accounts Funds."
Dr Hassan maintained that this view bars the use of Article 78 of Constitution for raising a Fund dedicated to the construction of dams. However, the Supreme Court has powers to interpret the Constitution, which it has done to set up the Fund under the Article 78.
The service charges/taxes collected from the cell phone users through mobile phone bills cannot be recovered and deposited in the Fund for the utilisation of the dam project. The counsel said charged service charges/taxes can only be deposited into the Fund with the expressed consent of the cell phone users from whom these amounts were 'illegally' charged.
The water charges paid by mineral water and other beverage industries for the extraction of groundwater shall form part of the Provincial Consolidated Fund of each province in terms of Article 118 of the Constitution. The amounts from a Provincial Consolidated Fund can only be utilised through the procedure of passing of an Annual Budget Statement by the provincial assembly in term of procedure provided under the Articles 120-125 of Constitution.
About the association of Abdul Razak Dawood, Advisor on Commerce and Textile to the Prime Minister, with Descon Engineering Limited, Dr Hassan submitted that there is no conflict of interest as he is not an advisor of Ministry of Water and Power.