The non-payment of hydel profits has been long cited by K-P’s rulers as one of the reasons for the lack of funds in the province’s kitty and thin disbursement for development projects. STOCK IMAGE
The Khyber-Pakhtunkhwa government claimed to achieve a breakthrough in bilateral negotiations over the uncapping of net hydel profit (NHP) proceeds with the federal government.
According to a handout issued by the K-P Directorate of Information on Friday, the province will now receive an annual share of Rs16 to 17 billion for the NHP. The amount had remained frozen at Rs6 billion since 1991, giving rise to a long-standing debate over an unequal distribution of rightful wealth amongst provinces.
The K-P government was receiving 37 paisas per unit of electricity produced on its home soil under the age-old formula. During the previous provincial and federal governments, an agreement was struck to increase the per-unit rate to Rs1, however, it never saw the light of day in their tenures.
Friday’s handout stated a draft agreement will be jointly chalked out by the provincial and federal governments shortly. Two perpetually occuring demands—the payment of NHP arrears from 2005-06 to 2011-12 and the mark-up payable over the principal amount of Rs110 billion as part of the Arbitration Award—are said to be incorporated in the new mechanism.
Talks on top
The decision to broker a deal is said to have been taken during a high-level meeting chaired by Federal Minister for Water and Power Khawaja Muhammad Asif in Islamabad on March 16. The ministry’s federal secretary and joint secretary, federal ministry of finance representatives, Water and Power Development Authority (WAPDA) officials, special secretary finance Muhammad Faheem, legal advisor Shumail Butt and Pakhtunkhwa Energy Development Organisation CEO Umar Akbar were among the attendees.
Wapda’s reluctance in rubber-stamping recommendations of the technical sub-committee had been one of the chief reasons behind the prolonged nature of the dispute.
The information directorate stated Asif’s categorical stance over the spirit of federalism led the authority to give in. “He agreed to the demands of K-P and considered them as reasonable and genuine,” the handout read.
A new dawn?
The non-payment of hydel profits has been long cited by K-P’s rulers as one of the reasons for the lack of funds in the province’s kitty and thin disbursement for development projects.
The agreement is being considered as a critical breakthrough and that it will help K-P overcome its budgetary deficit, forward its agenda for rapid socio-economic development and prepare a friendlier economic policy for the terror-hit province.
The notification stated Chief Minister Pervez Khattak held a series of meetings with federal bigwigs in the past. Deadlock between the two governments had compelled the K-P treasury to adopt a more fervent policy as Minister for Finance Muzaffar Said had earlier announced intent to boycott the National Finance Commission meeting over the non-payment of the NHP.
While talking to The Express Tribune, Said confirmed the development and said both the governments have “agreed in principle” over the payment of the national wealth generated from hydel power projects. “We are confident that the decision will be implemented in letter and spirit,” he added, without disclosing further details.
Published in The Express Tribune, March 21st, 2015.
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