Pakistan Court Shuts Power Plants

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One of his prize plants was in Naudero in Sindh province. The $70 million plant was inaugurated by Zardari, who touted it as part of the solution to the energy crisis. It was supposed to provide power to local towns and villages and for wells vital to agriculture in the area, but it ran only to a fraction of its capacity. Hours after the Supreme Court ruling, it was shut down. Walters now says he can't get permission to recover the machinery from the site.

He said the opposition and the court were trying to score political points.

"Calling it a scam is nothing but an effort to embarrass the government by two members of parliament who managed to get the Supreme Court on their side," said Walters.

It's a similar story with the other foreign investor to take up the offer. Turkish company Karkey Karadeniz Elektrik Uretim invested $350 million in hulking floating power barges that were moored off the port city of Karachi. They started operations in April last year, but they were supplied little or no gas. The Supreme Court ruling ordered the company to repay a $180 million advance it was paid by the government. In a statement, Karky said it had started arbitration proceedings against the government and that the court ruling contained several material and factual errors.

The Supreme Court investigated the projects under so-called "suo moto" provisions, which allows it to initiate cases based on the "public interest," instead of waiting for cases appealed from lower courts to land in its docket.

It has passed similar orders on the price of sugar and established commissions to recover written-off loans, areas of economics and policy that some say should rarely be its business.

Saleem Mandviwalla, the head of Pakistan's Investment Board, said he was bewildered by the latest court order.

"This will not only effect the power business, but every business," he said. "All it has done has created more problems for Pakistan."

A recent report by the International Commission of Jurists said that the court was using "suo moto" investigations excessively, and that "when they are inappropriately applied, they may upset the balance of power and interfere with the ordinary course of justice."

But in a country where even government supporters admit that it has done nothing to curb corruption or make policy, some say that the Supreme Court is their only hope.

"All in all, they shouldn't be looking at this stuff, but if you were going to kill any policy, this would probably be it," said Feisal Naqvi, a lawyer and blogger. "The rental power policy was asinine."

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