ISLAMABAD: Following similar concerns voiced by Germany and the United Kingdom, France has expressed apprehensions regarding the difficulties faced by its energy companies operating in Pakistan. These concerns were highlighted by French President Emmanuel Macron during a recent bilateral meeting in Riyadh with Prime Minister Shehbaz Sharif. The Prime Minister assured Macron that these issues would be addressed, according to sources close to the Special Assistant to the Prime Minister (SAPM) on Power.
Meanwhile, the Ministry of Foreign Affairs (MoFA) informed the SAPM on Power about a claim filed by Karim-ud-Din, owner of the Halmore power project. The claim alleges breaches of Pakistan’s international obligations under the Bilateral Investment Treaty (BIT) and has been submitted through a Paris-based legal counsel.
The BIT, signed between Pakistan and the UK on November 30, 1994, includes provisions for dispute resolution under Article 8. This allows disputes between an investor and the host state to be submitted to international arbitration if unresolved within three months of notification. Karim-ud-Din’s counsel has initiated this process, reserving the right to pursue arbitration under the rules of the United Nations Commission on International Trade Law (UNCITRAL).
The notification details allegations of coercion and discriminatory practices against Halmore Power. It claims that the company’s CEO was threatened with detention unless pre-determined terms, potentially leading to bankruptcy, were accepted. While state-owned energy producers and IPPs owned by Chinese investors have reportedly been unaffected, privately owned entities like Halmore face targeted pressures, endangering their operations and personnel.
Sources note that while issues concerning Germany’s Siemens-backed Rousch Power have been resolved, challenges faced by Halmore and French firms remain unaddressed. MoFA has urged the Ministry of Commerce, Board of Investment, and other stakeholders to evaluate the claim and devise an appropriate response.
The unresolved challenges threaten to strain Pakistan’s energy sector relations with international investors, requiring prompt administrative and diplomatic interventions.
Story by Mushtaq Ghumman
