ISLAMABAD: The Supreme Court has been urged to instruct the secretaries of the ministries of energy, water and power, and other relevant bodies to halt payments to Independent Power Producers (IPPs), arguing that such payments lack justification under the Constitution, Power Purchase Agreements, Implementation Agreements, and other related contracts.
On Monday, the President of the Lahore High Court Bar Association, along with the Bar Association, filed a petition under Article 184(3) of the Constitution. They named as respondents the Federation through the Cabinet Secretary, the Secretary of the Ministry of Water and Power, the Secretary of the Ministry of Energy, the Chairman of WAPDA, the Central Power Purchasing Agency, and the CEO/Director of NTDC.
The petitioners contended that despite the constitutional right to a dignified life, citizens nationwide are burdened by exorbitant electricity bills, unannounced and prolonged load shedding, and overloaded transmission and distribution lines, leading to frequent outages.
They further highlighted that inefficiencies and mismanagement within the power sector have not only degraded the quality of life but also imposed unsustainable financial burdens on citizens.
The petitioners clarified that they do not aim to obstruct or cancel contracts that contain fair, reasonable, and lawful terms and conditions for investors. Instead, they seek a judicial review of energy policies, the actions or inactions of the respondents, and the contracts made with IPPs.
They noted that issues such as capacity payments, high input and fuel costs, and payments to inactive IPPs have raised significant public interest concerns regarding the enforcement of fundamental rights.
The petitioners requested the Supreme Court to declare the Power General Policy of 1994 and all subsequent related policies unconstitutional and contrary to the public policy of Pakistan. They also sought to invalidate the Power Purchase Agreements, Implementation Agreements, and related contracts that impose unfair terms—such as capacity charges and guaranteed payments without fulfilling IPP obligations—as one-sided, unjustified, non-transparent, unlawful, and discriminatory.
Additionally, they asked the Court to mandate the respondents to disclose each Power Purchase Agreement, Implementation Agreement, and related contract to the apex court and to the petitioners. They requested separate treatment for each IPP based on the following criteria:
a. IPPs wholly or majority owned by relevant respondents and/or state enterprises.
b. Power Purchase Agreements and Implementation Agreements with IPPs that are not producing electricity or meeting their performance obligations while still receiving capacity charges and guaranteed payments.
c. Agreements with foreign investors who have divested their interests, leaving the IPPs solely owned by Pakistani investors, to assess the validity and potential modification or revocation of any government guarantees.
d. Agreements with foreign investors and companies where government guarantees are in place, particularly those involving unfair and unreasonable capacity charges and guaranteed payments, which should also be categorized accordingly.
