Senate panel links NHP payments to exchange rate

Senators decide to keep AGN Kazi Formula unchanged for now

ISLAMABAD: A senate panel on water resources on Tuesday decided to keep a controversial formula for determining the net hydel profit payments to the northwestern province unchanged for now even as it linked the payments to the exchange rate of the United States dollar.

This was directed in a meeting of the Senate Standing Committee on Water Resources which met with Senator Shamim Afridi in the chair.

During Tuesday’s meeting, Jamaat-e-Islami (JI) Senator from Khyber-Pakhtunkhwa (K-P) Mushtaq Ahmed said that in its December session, the standing committee had thoroughly discussed issues about royalty payments on power generation. However, he stated that no heed had been paid to their protests and that over eight months later, they had reconvened with the same answers from the power management institutions.

He added that taking profits on hydel power was K-P’s constitutional right but the province was being denied this right for the past four decades despite approval from the federal cabinet.

Senator Ahmed expressed his astonishment at how the energy ministry had declared profits of K-P as illicit.

Committee chairman Afridi, from the erstwhile federally administered tribal areas (Fata), noted that the K-P Chief Minister (CM) Mahmood Khan in a recent statement had highlighted how the Aftab Ghulam Nabi Kazi (AGN Kazi) formula was being made controversial.

He lamented that instead of resolving the issue, the institutions had turned it into a football to ping between them.

A member from the Water and Power Development Authority (Wapda) finance department told the committee that net hydel profits (NHP) NHP began in 1992.

He added that back then, the provinces and the federation had agreed upon a sum of Rs500 million to settle the matter. He clarified that neither did Wapda fix a tariff nor did it collect anything. The official suggested that a final decision on the NHP rate would be taken by the Council of Common Interest (CCI) — which had termed the AGN Kazi formula as accurate in line with the rulings and determinations of the Supreme Court, the federal cabinet the NFC and other stakeholders.

The committee was further told that the government has now appointed a permanent deputy chairman of the power authority should be asked to produce a report on the matter.

The committee, thus, decided not to change the formula and asked to fix a timeframe to resolve the issue while it asserted that K-P’s share should be paid following the current exchange rate of the dollar.

Leader of the House in Senate Senator Shibli Faraz defended the government, stating that they were paying capacity charges to K-P. However, he complained that they were not receiving anything in return.

He added that the third-quarter report released by the State Bank of Pakistan (SBP) in this regard was against the interests of the provinces and was maligning the issue.

Pashtoonkhwa Milli Awami Party (PMAP) Senator Usman Kakar said that non-payment of NHP dues was a significant issue for K-P and an injustice with a critical unit of the country.

He further complained that the government was prioritizing a non-hydel mix in alleged enmity and suggested that the government should focus on cheap, renewable power sources such as solar and hydel.

Earlier, as a sign of protest, the committee members stopped Wapda officials from briefing the committee owing to the absence of their chairman.

Senator Rana Maqbool stated that the Wapda chairman should be informed, through a letter, about the reservations of senators over his absence.

The meeting was attended by Senators Faraz, Dr Jehanzeb Jamaldini, Rana Maqbool Ahmed, Hasil Khan Bizenjo, Mir Yousaf Badini, Kakar, Syed Muhammad Sabir Shah, Walid Iqbal, Ahmed, Sassui Palijo and Mir Kabir Shahi along with Ministry of Water Resources deputy secretary, chairmen of Indus River System Authority (IRSA), National Electric Power Regulatory Authority (NEPRA), Wapda finance member and other senior officials.

Published in The Express Tribune, September 4^th, 2019.