EPA objection to land purchase: PPIB fails to settle IPP-Balochistan dispute

[Naveed Yaseen]

MUSHTAQ GHUMMAN
ISLAMABAD (June 06 2009): The Private Power Infrastructure Board (PPIB) has failed to settle a dispute between Allied Energy Services (AES) Pakistan, a subsidiary of AES Corporation, of USA, and the Balochistan government over purchase of land for a 1000-1200 MW imported coal-based integrated power project, sources told Business Recorder.

The main dispute between the firm and the provincial government is the 'link' between Environmental Impact Assessment (EIA) and purchase of land for the project to be set up in Gadani (in Lasbela district). PPIB is a subsidiary of Water and Power Ministry whose responsibility, on paper, is to facilitate power projects sponsored by private sector, but unfortunately has been focus of numerous investor complaints for not properly assisting them.

An example of its poor governance is reflected in the case of incumbent Managing Director, Fayyaz Elahi, against whom a case had been sent to the National Accountability Bureau (NAB) by the Nawaz Sharif government. His services were terminated by Prime Minister Yousaf Raza Gilani, but brought right back because of his 'influence' with Minister for Water and Power Pervez Asharaf.

Pakistan Environmental Protection Agency, in a letter addressed to PPIB MD on August 23, 2008, had stated that the contents of Balochistan Environmental Protection Agency (BEPA) letter have been examined. Further, a summary of the EIA of 1000-1200 MW imported coal power project has been carried out.

Pak-EPA, according to the letter, was of the view EIA report may be accepted for initiating the review process subject to the fulfilment of the prescribed procedure and for the identified project by the proponent. As regards the land holding of the proposed project, Pak-EPA had clearly stated that this may not be required under IEE/EIA Regulations, 2000, as the jurisdiction of this issue rests with local administration.

Pak-EPA, however, was of the view that EPA Balochistan should initiate the review process and the decision may be taken on environmental approval specifically mentioning the identified project site. Any change in project site will be subject to a fresh submission of the EIA report.

On May 18, 2009, AES, Pakistan, in a reply took strong position, stating that based on the legal advice the firm obtained from a reputable law firm and environmental consultants, the pertinent law (Pakistan Environment Protection Act) does not require the company to purchase land before the EIA approval. Rather, EIA approval process would set out the guidelines for the land acquisition process.

"It is ironical that the Balochistan Environment Protection Agency (BEPA) has been imposing upon the company this condition to acquire land which would enable us to initiate the EIA approval process as no legal provision whatsoever has been referred by BEPA in any of the AES meetings and letters issued to the company till May 18, 2009," the letter said.

The feasibility of the project was approved by the GoP whereby site of the project was earmarked at Gadani on which EIA has been carried out by the company and submitted to BEPA for its approval. Further, the company commenced the process of land acquisition as per the Land Acquisition Act required for the project and has a contract which gives the firm the first right of refusal with the private land owners.

Now, PPIB has approached the Secretary Environment, Balochistan saying that BEPA and provincial government should facilitate and expedite this process. In December, AES had apprised the PPIB that Chinese government had restricted its contractors from taking part in any project in Balochistan due to worsening law and order situation in the province. "One of the Chinese leading contractors had conveyed to the firm the Chinese embassy's decision not to allow its citizens to work in Balochistan," sources added.

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