' KARAMAT NAZIR BHANDARI, J.--- By a short order, dated 10-10-2001 we dismissed Writ Petitions Nos.1569 of 1998 and Writ Petition No,2075 of 1998, for reasons to be recorded later. This judgment records the reasons for the above order.
2. The facts which can be said to be reasonably established and not in dispute are that by 1993- 1994 Pakistan was facing acute energy shortage and loadshedding for hours even in urban areas was necessitated. The rural area situation was for verse. The planners also expected a reasonable increase in demand for electricity in the coming years. The Government of Pakistan, therefore, announced an energy policy in the year 1994. The document containing this policy was entitled "Policy Framework and Package of Incentive for Private Sector Power Generation Projects in Pakistan ....". Respondents' Nos.3 to 20 in Writ Petition No,2075 of 1998 were persuaded by the policy, to invest in the private sectors generation project. Amongst others a bulk tariff of U.S. Cents 4.7 per KWH and purchase of 60% of the capacity production by WAPDA were considerations prevailing with the respondents-Powers Producers. They, therefore, decided to invest and enter into Power.
Purchase Agreement (PPA), Fuel Supply Agreement (FSA) and Implementation Agreement (IA). The terms and conditions of the agreements were applicable "to all producers, subject to minor changes". It may be noticed that respondent No,3 Hub Power Project had already entered into arrangements, prior to announcement of energy policy. After execution of agreements, the respondents IPPs went into construction and installation of necessary machinery and most of them started commercial production by mid 1997/end of 1997. The Government of Pakistan as well as the respondent No,1 were thus able to overcome the shortage of electricity. However, ' the cost of electricity recovered from the consumer went up. Perhaps distressed by the increase in the cost of electricity, the two petitions were lodged in this Court around February/April, 1998.
3. It is contended by Mr. Maqbool Sadiq, Advocate, learned counsel for the petitioners that the agreements are uncalled for, oppressive, inequitable, unconscionable and, therefore, liable to be set aside. It has been suggested that instead of going for Hydel Projects which are internationally recognized mode of procuring cheap electricity, the Government of Pakistan deliberately went for Thermal Projects as some of its members wanted to enjoy huge commissions and kicks back. In particular the clause in the agreement for compulsory purchase of 60% of the total capacity of projects has been subjected to challenge. By borrowing the statistics furnished by respondent- WAPDA, Mr. Maqbool Sadiq has attempted to show that WAPDA had to and is paying huge amounts running into billions, although WAPDA has no need to purchase such quantity of electricity. He has also explained that as a result of this compulsory purchase WAPDA had to close its own thermal plants, which resulted in unemployment of labour. Grievance has been repeatedly made of the increase in electricity bills, the burden of which has become unbearable for citizen and Mr. Maqbool is attributing all this to the agreements in question. In reply, Mr. Tariq Kamal, Advocate, appearing for WAPDA has by and large justified the impugned agreements. However, he did state that some difficulties arose with Power Producers, which have been sorted out or are in the process of being sorted out. He has submitted that hydel energy is no doubt cheap but construction of dams etc. Takes much more time than installing and operating the thermal plants.
He explained that Government of Pakistan faced political constraints and in its wisdom decided to defer the construction of Kala Bagh Dam, which if built, would certainly have given enough electricity at very cheap rates. The rates as well as clauses for compulsory purchase are justified by referring to detailed statistics. He argued that as originally planned the enhanced demand in electricity would have upset the burden of WAPDA but unluckily the demand did not increase due to economic factors and depression in economic activities resulting in closure of many Industries.
He urged that the agreements were fair, inasmuch as, neither Government of Pakistan nor WAPDA invested a single penny in the projects.
4. On behalf of respondents-Independent Power Producers, their learned counsel have challenged the locus standi and motives of the petitioners to file these petitions. It is submitted that the petitions filed in February, April, 1998 suffer from laches and if the petitioners were serious, they could have challenged the agreements in the year 1995 when most of them were entered into.
They further argued that having stood by and allowed the execution of agreements and subsequent construction and installation of plants and their commencement of commercial operation by 1997, the petitioners are debarred from challenging the same. It is also urged that the grant of writs as prayed for would cause colossal damage not only to the IPPs but also to the economy of Pakistan. It will also bring bad name to Pakistan whose Government has given sovereign guarantees to the Power Producers so as to safeguard them against losses and ensure them a minimum return on the capital invested. They have also argued that judicial interference in agreements of such complicated nature is not called for and in any case is unprecedented. On merits, they have justified the agreements and the clauses therein.
5. As noted, the energy policy was announced in 1994 and most of the impugned agreements were entered into in 1995 or thereabout. Most of the Power Producers (if not all) completed the construction and installation of the projects and went into production towards the middle of 1997 or end of 1997. Undisputedly, they imported sophisticated machinery and invested huge amounts running into million and billion of Rupees. It also involved investment of lot of foreign currency.
During all this period, the petitioners stood by. It is not their case that they never learnt of the energy policy or the agreements in question. They did not seek judicial interference in 1995, in 1996 and in 1997. It was only in April, 1998 that these two petitions were filed in this Court. Petitioners are clearly debarred from challenging the validity of agreements at such a belated stage. It is not required to go into the motives even though it has been suggested by respondents that the petitions are filed with ulterior and ill motives. It is in this context that the petitions can be held to be suffering from laches and liable to dismissal on this ground as well.
6. There is another very serious aspect of the case, which deters us from interference in the matter at this juncture. We repeatedly questioned Mr. Maqbool Sadiq to address us about the consequences, which will follow in the event the petitions are allowed and agreements are declared null and void. One result of allowing these petitions is that all the Power Producers- respondents will shut down their projects by removing machinery etc. Pack up and go home. To us, it would be a disastrous consequence not only to production of electricity but also to the economy as a whole. The foreign investors will loath to come to this country as their agreements entered into with Government and containing sovereign guarantee can be declared void, even years after the agreements have been .Duly acted upon. It should also be kept in mind that the contracting parties seem to be fairly happy with the agreements and their working. If it be case of two evils, the Court will lean- in favour of lesser evil i,e, costly electricity. Keeping in view all the circumstances, we are more than satisfied that the Court should decline interference.
7. As the petitions can be and are being disposed of on the above points, it is considered inexpedient to enter into and determine the validity and reasonableness of various clauses of the agreements. Again it cannot be lost sight of that the contracting parties do not seek any intervention and are fairly content and happy about the working of the agreements. Mr. Tariq Kamal did say that some difficulties arose which have been sorted out and even in future the difficulties will be duly taken care of. It may also be borne in mind that by and large it is not within the province of the Courts to sit over judgment upon the wisdom behind policy. Policy making is the exclusive domain of other two organs of State and the Courts are not entitled to interfere in the policy.
8. For what has been stated above, these two petitions are dismissed with no order as to costs.