K-P govt fails to recover Rs65b from centre

Provincial govt had claimed about recovering the dues in November

PESHAWAR: The Pakistan Tehreek-e-Insaf (PTI) government in Khyber-Pakhtunkhwa has failed to recover the province’s share in Net Hydel Profit (NHP) from the centre.

Though PTI rules in both the province and the centre, the federal government has yet to start transfer Rs65 billion it was supposed to pay the K-P government for NHP.

This amount includes Rs39.984 billion of annual NHP share and Rs25.293 billion in the form of payment of arrears.

The KP government has shown Rs65.2778 billion rupees being due from the federal government for the financial year 2018-19.

The K-P government had claimed it will get the payment from the federal government by November. However despite the passage of two quarters of the financial year, the federal government could not start payment to the province. In this regard, government sources informed that the provincial government was continuously in contact with the federation and was making efforts that this amount was received during the third quarter. This will allow the provincial government to better plan develops projects. In case this amount is not received then the transfer of the amount will be ensured by contacting the centre.

The PTI government had unveiled on October 15 its first budget for its second term in the K-P Assembly with a total outlay of Rs648 billion for the fiscal year 2018-19, including Rs30 billion surplus from the last fiscal year.

Finance Minister Taimur Saleem Jhagra had told the house that the provincial government will get Rs491.3 billion from the federal government or around 75.82 per cent of the total provincial budget. This includes Rs360.4 billion as part of K-P’s share in the taxes collected by the Federal Board of Revenue (FBR). A further Rs43.3 billion will be provided as a percentage of the divisible pool for war on terror — which K-P has been getting under the national finance commission (NFC) award.

Jhagra had told the house that government is expecting to get Rs65 billion as net hydel profit (NHP) from the hydro-electric generation in the province and K-P’s outstanding arrears to the federal government.

He had expressed hope that NHP issue will be resolved through the AGN-Kazi formula after which province’s share in the profit would cross Rs100 billion.

The formula devised by a committee led by Aftab Ghulam Nabi Kazi (AGN-Kazi) in 1985 was based on average sale rate of electricity, but it did not take into account all the costs incurred to generate that revenue.



Khyber-Pakhtunkhwa Chief Minister Mahmood Khan had said in December that Prime Minister Imran Khan has assured him that under the AGN Kazi formula the net hydel power share of the K-P government would be duly given.

“The province would get its dues and transfer of resources soon,” the CM had said.

Moreover in the first week of January, Adviser to the Chief Minister on Energy Himayatullah Khan had told the media that the K-P government had demanded of the federal government to provide it its due share in NHP under the AGN Kazi.

While recovery of Rs65 billion does not seem likely, the advisor was demanding over Rs250 billion from the centre.

He had told the media that under the AGN-Kazi formula, the province would get its annual share of Rs128 billion, while with the addition of Tarbela IV and V extension projects, and Dasu, K-P’s share in NHP would increase to Rs250 billion a year.

NHP remains a main source of financing for the K-P government. If there are two different parties ruling in the centre and province, the NHP payments become a political issue. However, with PTI government in Islamabad and Peshawar, the delay in NHP payment was more of a financial than a political issue, sources said.

Published in The Express Tribune, January 15^th, 2019.