K-P government to take up NHP non-payment issue with centre

Federal govt has blocked payment of Net Hydroelectric Profit

PESHAWAR: Khyber-Pakhtunkhwa government will take up the issue of non-payment of the Net Hydroelectric Profit (NHP) with the ministry of water and power on Friday.

The federal government has blocked payment of Rs16.5 billion worth of the arrears of the NHP and the principal amount of the K-P government which it was supposed to pay in the fiscal year 2016-17.

Sources in the K-P finance department told The Express Tribune that the provincial special secretary finance and a deputy secretary have been directed to hold a meeting with the Joint Secretary (Power & Finance) Zargham Eshaq Khan, at the ministry of water and power and Wapda’s member on Friday.

“The secretary finance is deeply concerned about the non-payment of Rs16 billion of the province by the federal government,” said an official seeking not to be named adding that the finance secretary is also expected to go to the meeting.



The official said that Rs16 billion was a huge amount and could be spent on development activities in the province if paid on time. “It is our province and it’s the peoples’ right and Rs16 billion is huge money so why have they kept it,” the official said.

The NHP has been a long outstanding dispute between K-P and the centre for decades. The present K-P government led by the Pakistan Tehreek-e-Insaf (PTI) inked a Memorandum of Understanding (MoU) with the federal government last year in February under which the federal government agreed to uncap the NHP at Rs1.10 per kilowatt-hour while the issue of arrears was also resolved once for all.

Regarding the arrears it was decided that the federal government would pay Rs70 billion to K-P in four tranches in which the first tranche for the year 2015-16 would be Rs25 billion while the remaining amount would be paid in three tranches of Rs15 billion one each year. Under the agreement the K-P share of NHP principal amount was calculated to an approximate sum of Rs18.7 billion per year as per the total generation of electricity.

In the fiscal year 2016-17 Wapda was supposed to pay Rs15 billion for the NHP arrears and Rs18.70 for the NHP principal amount but it paid only Rs11.885 billion against the total of Rs18.70 billion of the principal amount of the NHP, while, the remaining Rs6.815 is yet to be paid.

Similarly, in the arrears the KP government has received Rs25 billion of the first tranche on June 30, 2016, while, in the second tranche of Rs15 billion for the fiscal year 2016-17, the WAPDA has only paid Rs5.2 billion and the remaining Rs9.8 billion are still awaited.

PML-N, PTI rivalry

Sources in the government informed that the PTI rivalry with the Pakistan Muslim League-Nawaz (PML-N) is proving very costly for the K-P government. “The K-P’s own provincial receipts comprises only 7% of the total budget and the rest comes from the federal government which means K-P needs friendly relations with the centre,” said another official of the K-P who was critical of the PTI’s sore relations with the federal government.

The official was of the opinion that the federal government deliberately delays payments to K-P in order to give tough time to the PTI led coalition government. “Last year, the federal government paid us the NHP arrears on the last day of the fiscal years 2015-16 and that too in the evening so that we may not use the money in that year.”

Published in The Express Tribune, August 17^th, 2017.