Stay on suspension of gas supply to captive power plants vacated

Published March 19, 2021
The IHC chief justice withdrew the stay order issued against the federal cabinet’s decision of stopping gas supply to the CCPs of manufacturers and industries. — IHC website/File
The IHC chief justice withdrew the stay order issued against the federal cabinet’s decision of stopping gas supply to the CCPs of manufacturers and industries. — IHC website/File

ISLAMABAD: Chief Justice of Islamabad High Court (IHC) Justice Athar Minallah on Thursday gave the go-ahead to the federal government to implement its decision on discontinuing gas supply to captive power plants (CPPs), saying the judicial oversight in economic decision making could be detrimental to public interest.

Hearing a petition filed by 61 textile companies, the IHC chief justice withdrew the stay order issued against the federal cabinet’s decision of stopping gas supply to the CCPs of manufacturers and industries.

“The judicial oversight of the nation’s economic interests or policies by a High Court while exercising constitutional jurisdiction under Article 199 of the constitution could expose public interest to harm rather than advancing it.

“The courts may be experts in law and constitutional matters, but they are definitely not equipped nor have the competence, expertise and efficiency to deal or in any manner interfere with the economic policies of the government,” Justice Minallah said.

The decision of the federal cabinet to discontinue gas supply to the CCPs on Jan 26 was based on the fact that cheaper domestic gas supplies were declining and their consumption in inefficient CPPs of industrial consumers was a big national loss. On the other hand, the surplus power generation capacity had become another challenge and a significant part could be absorbed in these industrial units at competitive rates and reliable supplies.

Industry not currently connected to the power grid will be encouraged to shift from gas-based captive power generation to the national power grid. This process would be completed latest by December this year.

The companies had challenged the cabinet decision saying it was contradictory to their fundamental rights.

Asad Hayauddin, secretary to the ministry of petroleum and natural resources, told the IHC that the concept of CCP was being misconstrued by the petitioner companies. He said the policy making process was initiated more than a year ago and all the stakeholders were duly consulted.

Explaining the need for formulating the policy, Mr Hayauddin said supply of natural gas was allowed when there was an acute shortage of electricity while natural gas was in surplus. With depletion of natural gas reserves and surplus electricity, it has become inevitable to review the policy of supply of natural gas and distribution.

In response to a query, he told the court that the suspension or striking down of the policy would have profound consequences for the nation’s economy because on the one hand it will give rise to acute shortage of natural gas supply to the general public and on the other the crisis relating to circular debt would worsen.

According to him, those production units which do not have access to alternate sources of energy are exempt from implementation of the policy.

Justice Minallah observed that deference has to be demonstrably shown to the executive branch of the state in the context of its economic policies because it is a safer course for a court to adopt rather than exposing public interest to harm.

“The power of judicial review is, therefore, to be exercised with greater caution when the matter involves decisions and policies relating to the nation’s economy.”

Published in Dawn, March 19th, 2021

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