SC moved to ensure electricity supply ‘on least cost basis’
• Petitioners seek thorough forensic audit of all IPPs, lament people are suffering at hands of ‘predatory elites’
• Govt urged to recover excess profits earned by IPPs
• State ‘duty-bound’ to renegotiate agreements, says plea
ISLAMABAD: The furore over bloated bills reached the Supreme Court on Monday with two petitioners seeking a declaration that electricity supply to citizens “on a least cost basis” is the responsibility of the federal government under Article 9 of the Constitution.
They also sought an order for the federal government to share with the apex court details of all power purchase agreements, implementation agreements and related agreements.
One petition was moved by the Federation of Pakistan Chambers of Commerce and Industry through its Vice President Zaki Aijaz and the other by Lahore High Court Bar Association President Muhammad Asad Manzoor Butt.
The petition filed by the FPCCI through advocate Feisal Hussain Naqvi also urged the court to invalidate the policies of 1994, 2002 and 2015 because they permitted and continued to permit the disposal of state largesse other than on the basis of competitive bidding and without any rational basis.
The court was asked to declare that the government and its instrumentalities cannot profit from the provision of essential facilities, such as electricity, to the general public — where such facilities were not available except from the government. The court was also urged to order the government to commission a thorough forensic audit of all independent power producers (IPPs).
The government must implement the 2020 report by recovering excess profits earned by the IPPs, renegotiating all agreements and changing them from “Take or Pay” to “Take and Pay,” read the petition.
Besides, the court should order withdrawal of directions that allow dollarisation of amounts that were not actually invested or borrowed in foreign currencies.
The petition says it is a settled law that the right to life guaranteed by Article 9 of the Constitution includes the right to electricity. Consequently, the state’s failure to provide electricity in a reasonably affordable manner amounts to an unconstitutional infringement of the right to life of citizens.
The purchase of electricity done without competitive bidding exacerbates this foundational violation of the Constitution, the petition contended, adding that for the past thirty years the electricity sector has been used for uninformed experiments in policymaking, all of which have served only to enrich domestic and international elites at the expense of Pakistan’s citizens.
The first offender, the petition says, is the World Bank, which directly benefited from the “skewed incentives” in the 1994 Policy. The irony is that even though experts and the World Bank recognised that the 1994 Policy was flawed, that same policy lives on in the form of the 2015 Policy.
The government was on track to pay Rs2.1 trillion in capacity payments while circular debt for the energy sector in 2024 reached Rs5.422tr, the petition feared, adding that at the same time, numerous IPPs are being paid billions despite the fact that they are not producing any electricity.
Meanwhile, the government is trying to recover higher and higher tariffs from a smaller pool of customers.
There is no public explanation of why the 2020 report remains unimplemented, the petition regretted, adding that power sector is thus a paradigmatic example of regulatory capture where people continue to suffer at the hands of predatory elites.
“Pakistan has spent thirty years on IPP path with nothing but misery and impending bankruptcy to show for its pains. We can no longer afford such insanity,” the petition said.
‘Right to lawful business’
The other petition, filed by advocate Hasan Irfan Khan, sought a direction that expensive electricity was against Article 18 of the Constitution which guarantees the right to lawful business without any discrimination.
The expensive electricity has made it impossible for people of the country to conduct businesses by causing severe economic brunt to consumers, it argued, adding that state and its functionaries were duty-bound to renegotiate the agreements and, where possible, terminate the same within the boundaries of default termination clause.
The hurdles and impediments in the way of smooth business not only dishearten and frustrate the individual or aggrieved persons but such obstruction to perform legal and lawful activity has tendency to create chaos, anarchy and unlawfulness in the state, the petition argues.
Published in Dawn, August 6th, 2024