PAKISTAN Law and Practice Contributed by: Nadir Altaf and Muhammad Fahim Khan, RIAA Barker Gillette
3.4 Eminent Domain, Condemnation and Expropriation Rights to Construct and Operate Generation Facilities Power project developers themselves are not granted the right of eminent domain. However, the government is empowered under the Land Acquisition Act 1894 (the “Acquisition Act”) to assist developers in acquiring land for public purposes, which includes electric power gen- eration for sale to the government (ie, CPPAG). Through the Acquisition Act, a project will ask the government to acquire the land from private citizens. The government will do so and require that the project company deposit compensation with the government, which is then disbursed to the landowners. If the project company wishes to acquire land from the government, it may do so under the Colonization and Disposal of Government Lands Act 1912 through the issuance of a Statement of Conditions that specifies the purpose and terms applicable to such state lands. In other cases, especially where the land is already owned – or has been acquired – by the government or a third party, the project company may enter into a lease for the project land. 3.5 Decommissioning a Generation Facility The term of each generation licence is designed to be commensurate with the useful life of the project. Nevertheless, some projects opt for ear- ly decommissioning or changing their fuel and/ or upgrading their units in order to extend the useful life of the project. Under the Generation Licensing Rules, decom- missioning of a plant without obtaining NEPRA approval will result in a breach of the term of the licence. This may lead to NEPRA penalising the licensee by revoking/suspending the licence,
appointing an administrator for the generation business, or imposing a fine. There have been instances where NEPRA has allowed decommissioning on application from an IPP. NEPRA usually requires that the IPP apply for cancellation of its licence (if the licence is still valid). Where only certain units are to be decommissioned, then the licence may need to be modified. NEPRA then allows decommis- sioning if there is no contractual obligation under the implementation agreement for transfer of the facility to the federal government. At the end of the term of the concession agree- ments for most hydropower projects, the rel- evant government has the option of having the project transferred to it for a nominal sum. To date, none of the power projects whose conces- sion agreement terms have expired have been transferred to the government. 4. Transmission Lines and Associated Facilities 4.1 Constructing and Operating Transmission Lines and Associated Facilities The construction and operation of transmission facilities is regulated pursuant to: • the NEPRA Act; • the Tariff Rules; • the Transmission Performance Standards Rules; • the Grid Code; • the Eligibility Criteria (Transmission Licences) Rules 2023 (the “Eligibility Rules”); • PEC by-laws; and • the Electricity Act 1910.
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