ISLAMABAD, Aug 15: The Islamabad High Court turned down on Friday a request to stay the construction of Munda Dam by Wapda.

Chief Justice Sardar Aslam declined to accept the request while hearing an application filed by the Munda Hydropower Company Limited (MHCL).

Munda Dam is one of the five major power projects to be built on Swat river in the NWFP at a cost of over Rs71 billion.

The project, with a water storage capacity of 1.3 million acre feet, is expected to produce 740MW of electricity. It will be completed in 2016.

The company has filed a civil suit of $1.2 billion against Wapda, the Private Power Infrastructure Board (PPIB) and the federal and NWFP governments.

Senior Advocate Abdul Hafeez Pirzada, representing the company, informed the court that Wapda was illegally and unlawfully building the dam since the power policy of 2002 contained assurances from the government of Pakistan in favour of foreign investors and, therefore, the plaintiffs had legitimate expectation that all stages of the project should be completed by them.

In May 2004, the government had issued a letter of interest to a US-based company, Amzo Corporation LLC, for carrying out a feasibility study of the project. Later, MHCL was incorporated as a special project company.

The two companies completed the feasibility studies and submitted them to the Ministry of Water and Power.

Mr Pirzada argued that instead of allowing the companies to complete further stages of the construction, the government had unilaterally snatched the project from them and handed it over to Wapda.

Wapda’s counsel Barrister Masroor Shah argued that the companies were not entitled to any equitable relief under the Specific Relief Act, 1877, because they had approached the court with unclean hands and got themselves entangled in shareholding disputes.He produced a judgment of the County Court of State of Maryland, USA, whereby partners of the plaintiff companies obtained injunctions against each other alleging fraud and unfair means in the course of the execution of the project.

Barrister Masroor said the country was facing electricity crisis. “There is paucity of water for irrigation while no effective means exist for flood mitigation. In the premise, the government entrusted this mega project to Wapda which lived up to the challenge and accepted this Herculean task of great public duty.”

In these circumstances, the counsel contended, the hands of the high court were tied to grant any injunction against Wapda.

He also objected to the MHCL’s claim of spending $15 million on the feasibility studies which, according to him, were full of flaws and did not cater to multi-purpose functions of the dam -- irrigation and flood mitigation.

In response to the company’s contention about legitimate expectation, the counsel said that legitimate expectation was always subservient to public policy and private rights, if any, could not override the public interest.

The power policy 2002 was only a guideline for investors and did not have any binding effect like a contract, he said.