The government remains at loggerheads with the independent power producers (IPPs) as it seeks to prove allegations of corruption against them and reduce their tariffs.

The Lahore High Court was due to hear an appeal on 2 June by Hub Power Company (Hubco) for the cancellation of an 18 May court directive that cut its tariffs by half, and a 12 May order that prevented the company from transferring money abroad (MEED 29:5:98). On 25 May, Hubco denied allegations that it had not registered its property with provincial authorities. The Uch Power Plant, also located in the province, had also been issued a similar notice. Hubco also denied receiving a legal notice.

'The company has yet to receive any such notice and categorically states that it has fulfilled all legal requirements in setting up its facility in Hub, including registration of its property, and had duly made relevant payments in 1992,' a Hubco statement said.

The company confirmed reports on 24 May that police had ended a blockade of the plant and the 35 British nationals at the complex were safe. The British embassy said that it had complained to the government after police refused to allow the Britons to leave the plant. A police official denied police had stopped the Britons from leaving.

On 25 May, Canada's SNC-Lavalin Group denied allegations it was being investigated in connection with its holding in Southern Electric Power Company (Sepcol). 'It is possible that Southern Electric Power, which is a subsidiary which we have some part of with other investors, is under investigation,' said SNC spokeswomen Suzanne Lalande. 'What we say is that SNC-Lavalin has never been under any investigation.'

The government says that tariffs being charged by the IPPs are too high and have resulted in huge losses to the Water and Power Development Authority (WAPDA). The IPPs say they are not in a position to cut tariffs on their own and the government should cut fuel prices, increase the amount of electricity purchased from them and convince the international lenders to soften their loan repayment terms (MEED 29:5:98, Cover Story).