ISLAMABAD, Nov 4: The Islamabad High Court on Tuesday reserved its judgment on an appeal against refusal by the same court to suspend construction of Munda Dam in the NWFP.

The bench comprising Chief Justice Sardar Mohammad Aslam and Justice Raja Saeed Akram had taken up the appeal moved by the Munda Hydropower Company against rejection of the stay by a single bench. On August 15, the IHC had declined to stay the construction of the project undertaken by Wapda.

Munda Dam is one of the five mega power generation projects that is to be built on the Swat River. The Rs71 billion project is scheduled to complete in 2016. The dam is considered to be one of the largest hydropower and water storage projects designed to provide 740MW with a water storage capacity of 1.3 million acres feet.The Munda Hydropower Company had filed a civil suit worth $1.2 billion against Wapda, the Private Power Infrastructure Board and the federal and NWFP governments.

In May 2004, the government issued Letter of Interest to a US-based company - Amzo Corporation LLC - for carrying out the feasibility study of the project. Later, a special project firm, Munda Hydropower Company, was also incorporated. After investing $15 million, these companies completed the feasibility studies and submitted them to the ministry of water and power.

Senior Advocate Abdul Hafeez Pirzada, pleading on behalf of the company, had argued that Wapda was illegally and unlawfully constructing the dam since the power policy of 2002 contained assurances from the government in favour of foreign investors. Therefore, he added, the plaintiffs had legitimate expectation that all stages of the project should be completed by them.

Instead of allowing the plaintiff company to complete further stages of the construction, the counsel argued, the government unilaterally snatched this mega project from the companies and handed it over to Wapda.

Wapda counsel Barrister Masroor Shah argued that the plaintiff companies were not entitled to any equitable relief under Specific Relief Act 1877, as they approached the court with unclean hands and got themselves entangled in share-holding disputes.

He also produced a judgment of the county court of state of Maryland, USA, whereby the partners of the plaintiff companies obtained injunctions against each other alleging fraud and unfair means in course of the execution of the project.

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

Former Attorney General Qazi Jameel and Gul Zarin Kiyani also appeared before the court on behalf of the federal as well as the NWFP governments, respectively.