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SC declares power plant lease deal null and void

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ISLAMABAD: Declaring the coal-fired Lakhra Power Plant (LPP) lease agreement null and void, the Supreme Court (SC) on Wednesday directed the federal government to conduct an inquiry to fix civil and criminal liability in the case.

Hearing appeals by LPP Labour Union and M/s Habibullah Energy, a three-member bench of the court, headed by Chief Justice of Pakistan Iftikhar Muhammad Chaudhry, said that the lease agreement was against the Public Procurement Regulatory Authority (PPRA) rules.

The court was informed that the 20-year lease agreement between the Water and Power Development Authority (WAPDA) and the Associated Group was signed during the Musharraf regime.

During the course of proceedings, Water and Power Secretary Saifullah Chattha apprised the court that the federal government was postponing the leasing or privatisation of LPP until the court's verdict.

Additional Attorney General Shah Khawar admitted that the LPP's lease agreement was not transparent as the previous government had ignored merit while awarding lease to the Associated Group.

The entire process of leasing lacks transparency, he said, adding that it was in "clear violation of Public Procurement Rules Authority (PPRA)" rules.

He also told the court that M/S Associated Power Generation Company Limited was not pre-qualified for bidding of the lease of LPP.

The government in inclined to re-visit the deal and hold an inquiry against the people who were responsible for this "illegal, void deal", Khawar said.

The chief justice remarked that the government had to apprise the court why merit was ignored and what were the motives behind that. He said that the courts always decide cases keeping public interest in consideration instead of those of individuals. The court directed the government to take care of the interest of the Sindh government while awarding the lease contract.

It also directed the respondents to pay cost of the case to the Associated Group and Labour Union of Lakhra Power Plant, Jamshoro.

End.