Illegal deal: Top court nullifies Lakhra power plant lease


The Supreme Court on Wednesday nullified the lease of 150 megawatts Lakhra Power Plant project, terming it illegal and nontransparent. The plant was leased to M/s Associated Power Generation Company Limited by the Water and Power Development Authority (Wapda) for 20 years in 2006.

“The transaction between M/s Associated Group and Wapda is not sustainable being nontransparent and also suffers from irregularities, illegalities, omissions and commissions. [It also] violates the relevant rules as well as precedents set forth by the superior courts,” a three-judge bench noted in a short order.

The bench – headed by Chief Justice Iftikhar Muhammad Chaudhry – further directed the federal government to conduct an inquiry into the deal to fix the liability upon the beneficiaries in accordance with the law. Justice Jawwad S Khawaja and Justice Sheikh Azmat Saeed were the other members of the bench.

“We have heard the counsels for the parties at length and have examined the pleadings/documents placed before us for ascertaining as to whether the transaction between the parties, ie, the lease for 20 years in respect of the Lakhra Power Station GENCO-IV, dated 11.09.2006, followed by Power Purchase Agreement dated 15.12.2007 had been entered into in a transparent manner,” read the court order.

Earlier the government’s attorney Shah Khawar told the bench that the process to lease out the plant was not transparent and the government would initiate inquiry against those responsible.

During hearing Secretary Water and Power Saifullah Chattha told the apex court that the government had delayed the decision to privatise Lakhra Power Plant.

“The decision will remain delayed till the reservations on this project are removed,” Saifullah Chattha said in reply to a query by Justice Jawwad S Khawaja.

The court ordered him to submit a written statement regarding the government’s decision to delay.

It also admonished the water and power secretary for concealing facts about the LPP’s privatisation from Wapda’s counsel and Additional Attorney General, and directing him to file an early statement in this regard on Wednesday.

Published in The Express Tribune, August 22nd, 2013.