January 19, 2008	Saturday	Muharram 09, 1429

ISLAMABAD, Jan 18: The Supreme Court on Friday directed the Sindh High Court to settle within eight weeks a controversy over the leasing of the 150MW Lakhara power plant in Jamshoro to the Associated Group (AG).

The apex court bench had taken up an appeal of the Habibullah Energy Limited (HEL) against the December, 2007, order of the high court to hand over the plant to the AG which, according to the petitioner, had been done without hearing senior Advocate Abdul Hafiz Pirzada, representing the HEL, as he was on general adjournment.

The coal-fired 150MW plant is situated in Khanote village, approximately 50km from Hyderabad, on the right bank of the Indus river. The plant has three units, each of 50MW capacity. Its design is based on the fluidised bed combustion technology, introduced by the Chinese, and uses the indigenous lignite coal of the Lakhra field as fuel.

In December 2005, then prime minister Shaukat Aziz had directed Wapda to complete the rehabilitation and increase the capacity of the plant.

In its petition, the HEL claimed that the Lakhra plant had been surreptitiously granted to the AG with mala fide intentions after allowing it to match the bid of the most responsive bidder, even before the actual consideration of bids. Thus, the entire process was a farce.

Having a vast experience in coal mining and electric power (thermal) generation, the HEL claimed that the high court order of handing over the power project to another bidder was a violation of the principles of natural justice and the minimum requirements for safe administration of justice.

It was revealed to its shock and dismay, the petitioner claimed, that Wapda concealed and granted to the AG the right to match the lowest bid/offer on May, 2006, which came to the knowledge of the petitioner when the bids/proposal were opened and the bid document submitted by AG was read out on July, 2006.

During bidding only two parties, the HEL and the AG, had submitted their bids. The HEL quoted levelised tariff at US cents 5.17 per KWH based on an investment of $13 million, whereas the AG quoted US cents 5.89 per KHW based on an investment of $34 million. This was US cents 0.62 higher than the offer of the HEL.

In June, 2006, Wapda held detailed discussions with the two parties as a result of which the HEL offered a reduction in its levelised tariff to US Cents 4.994 KWH at 70 percent plant factor.

The petition stated that the bid floated by the HEL was absolutely clear and unconditionally accepted all parameters as required by Wapda, but even then the bid was accorded to AG ‘under pressure’.

The petitioner contended that the award of lease of the plant to the AG for 20 years by Wapda was unlawful, illegal, tainted with mala fide, irrational and in violation of procedural propriety and duty to act fairly.