CCI approves MoU on net hydel profit

PESHAWAR:

The Council of Common Interests (CCI) has given its verdict on a memorandum of understanding signed between the federal and Khyber-Pakhtunkhwa governments over the net hydel profit.

Officials in K-P government privy to the matter told The Express Tribune about the minutes of the CCI meeting held in Islamabad on February 28, 2016. At the meeting, CCI gave its nod of approval to the MoU under which both the governments settled their arrears for the net hydel profit.

The federal government agreed to pay Rs70 billion to K-P to clear its dues. The amount will be paid in four instalments.

The first will be Rs25 billion during the current financial year. The remaining will be paid in three annual instalments of Rs15 billion each.



The MOU was signed on February 25 at a meeting attended by Chief Minister Pervez Khattak, Federal Minister for Finance Ishaq Dar and Federal Minister for Water and Power Khawaja Asif among others.

To pay K-P government the arrears, the CCI has directed Water and Power Development Authority (Wapda) to file a tariff petition with the National Electric Power Regulatory Authority (Nepra), as agreed on the MoU.

“Wapda will file a petition with Nepra for a new tariff of electricity that would comprise the NHP component which will be paid to K-P,” an official explained as he was present in all meetings held on the subject.

The K-P energy and power department has written a letter to the federal secretary for water and power, asking for a meeting to discuss the tariff petition, said the official. However, K-P Minister for Water and Power Atif Khan was not available to comment on the matter.

However, at a news conference of Tuesday, Minister of State for Water and Power Abid Sher Ali said that K-P owes around Rs18 to Rs19 billion to the federal government because the former enjoyed differential subsidies despite them being discontinued.



Being the producer of hydroelectricity, K-P was enjoying differential subsidy, but the subsidy was discontinued during the previous government. However, it is said despite that, the province continued to enjoy a discounted rate on hydroelectricity, which is why the federal minister for power said the province owed money to the Centre.

But, K-P Minister for Finance Muzaffar Said has told The Express Tribune the decision that the federal government will pay Rs70 billion to the K-P government has been taken. He appreciated the CCI for endorsing signing of the MoU .

The minutes of the CCI meeting also shows the Punjab chief minister has appreciated the settlement of the NHP dispute between the two governments via the MoU. “Punjab and other provinces like the method of [signing] MoUs because [now] they know they can make use of it and can get their own demands met on a similar premise,” the official added. The minutes also show the Punjab government has asked the federal government to consider the province’s NHP along the same lines as K-P.

An official said the CM was pushing officials for the earliest possible release of the first tranche—Rs25 billion—as the government desperately needs the money to exit the financial crunch.

Published in The Express Tribune, March 16^th, 2016.