LAHORE: The Lahore High Court on Friday restrained the federal government from returning loan to the World Bank (WB) issued for investment in energy sector and summoned the Economic Affairs Division secretary on May 5.

Justice Khalid Mahmood Khan passed the interim stay on a writ petition moved by a private company (Pak Electron) challenging the bidding process initiated by the Faisalabad Electric Supply Company (Fesco) for manufacturing of transformers. The petitioner-company had qualified the bid.

The company, through its counsel, contended that Fesco had issued a tender in 2012 for manufacturing of transformers of various capacities. It said the tender was in violation of an SRO issued by the Federal Board of Revenue. The counsel pointed out that the FBR, under the SRO, had given 25pc exemption to local manufacturers in customs duty and landed cost.

However, he said, in the tender, the exemption allowed under the SRO was withdrawn and another additional tax was also levied. He said the matter was brought to the notice of the finance ministry through an application but the ministry had not decided it for the last two years.

The counsel argued that the project was being delayed due to slackness of the government that could cause a huge financial loss to the country.

He said the project was initiated with supportive loan of the World Bank issued the police to cancel the cases.

Earlier, the trial court had dismissed the application moved by the prosecution secretary. The court observed that the secretary could not issue an order for the withdrawal of cases and the prosecutor concerned could only move an application to this effect after a prior approval from the government.

Mr Rafiq was declared a proclaimed offender due to non-appearance before the court.