In its latest move in the ongoing argument over private power, the government has threatened to take independent power producers (IPPs) to court. At the same time, the State Bank of Pakistan has ordered banks to prevent Hub Power Company (Hubco) from transferring money abroad. The state bank acted on an interim order from Lahore High Court. The order was made after a consumer filed a private petition against high electricity tariffs.

The moves come despite written denials from 21 companies that they have not been involved in any corrupt deals. 'We have evidence that most of the companies have over-invoiced and siphoned off money from their projects,' Haleem Siddiqui, Water & Power Minister told Reuters in an interview. 'If the corruption charges are established, action should be taken against such companies,' he said. The government issued a decree in April which allowed it to cancel any agreements with power companies found to have conducted corrupt deals. The companies negotiated deals with the former government of Benazir Bhutto under which they built and now operate power plants, selling the power to state utility the Water & Power Development Authority.

The row between the government and the power companies has dominated the business news for two months. The government says that the tariffs charged by the companies are too high. It has asked the companies to cut their charges by 30 per cent. Prime Minister Nawaz Sharif announced on 9 May that nine of the companies had agreed to cut their rates (MEED 8:5:98).