Petitioner says delay in executing project can lead to World Bank cancelling loan.
PHOTO: LHC.GOV.PK
The Lahore High Court (LHC) on Friday restrained the federal government from returning an energy sector loan that the World Bank had extended to Pakistan. The high court summoned the economic affairs secretary in the case on May 5.
Justice Khalid Mahmood Khan issued this interim stay order on a writ petition by a private company (Pak Electron), which challenged the bidding process initiated by Faisalabad Electric Supply Company (FESCO) for the manufacture of transformers. The petitioner had qualified for the bid.
The counsel for the petitioner stated that the FESCO had issued a tender in 2012 for the manufacture of transformers of different capacities. It said the tender was in violation of a statutory regulatory order (SRO) by the Federal Board of Revenue. The counsel said that under the SRO, local manufacturers had been given 25 per cent exemption in customs duty and landed cost.
However, he said, in the 2012 tender the exemption allowed under the SRO was withdrawn and another additional tax levied. The matter was brought to the notice of the Finance Ministry through an application but the ministry had not made a decision on that in two years.
The counsel argued that the project was being delayed due to government slackness which could cause a massive financial loss to the country. He said the project was initiated with a supportive loan of the World Bank given to Pakistan exclusively for the energy sector.
He said that the Asian Development Bank (ADB) had recently withdrawn a loan to Pakistan because of inordinate delay in the execution of projects. He expressed the apprehension that the World Bank might also withdraw the loan if the government delayed the project.
Justice Khan deferred further hearing until May 5 and directed the government not to return the loan if the WB demanded it until the court had made the final decision on the petition.
The judge sought personal appearance of the economic affairs secretary on the next hearing.
Published in The Express Tribune, April 26th, 2014.
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