December 7, 2001	Friday	Ramazan 21, 1422

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ISLAMABAD, Dec 6: The government is considering extension of Wapda Act 1958 to the Azad State of Jammu and Kashmir, a move that could raise complex constitutional questions, Dawn learnt through government sources.

“We have received a letter from the Kashmir council stating that AJK government wanted to implement the Wapda Act in its territory,” a senior official in the power ministry confirmed.

The decision, if implemented, would enable Wapda to collect electricity bills from the people in Azad Kashmir directly at normal consumer rates, as applicable in the four provinces, instead of bulk tariff.

“But there is no decision yet. Discussions on the proposal have just started,” said the power ministry official. He said that since the issue involved legal and constitutional matters, a comprehensive exercise would be required in the federal ministries of law, finance, Kashmir affairs, water and power, besides Wapda and the AJK government.

Wapda experts, however, said they would oppose the move unless it favoured the utility financially. “The proposal has not reached the Wapda head office in Lahore as yet,” said informed Wapda sources.

Annual electricity being sold by Wapda to Kashmir under C-3 bulk tariff comes to around Rs3 billion or Rs250 million per month, Wapda sources said. The annual figure according to secretary electricity Azad Kashmir is around Rs2 billion and not Rs3 billion.

Secretary electricity Azad Kashmir, Sardar Mushtaq, told Dawn by telephone from Muzaffarabad that currently the state government was purchasing electricity from Wapda at bulk tariff and had to pay for the heavy losses unnecessarily. The discussion was on to convert bulk tariff into consumer tariff, he said.

He refused to acknowledge that a formal proposal was under consideration. Discussions were started sometime back, but, no progress could be made due to the Afghanistan situation.

Currently, the AJK electricity department is responsible for the distribution of power to consumers. The question whether the distribution would also be transferred to Wapda, has not been addressed to so far.

Wapda sources said that AJK wanted to turn around its accounts through conversion of bulk tariff into normal tariff because major portion of the electricity was consumed by small- slab lower domestic consumer groups. Average line losses were very high in the AJK like other parts of Pakistan.

These sources said that on an average the tariff charged by the AJK electricity department from its consumers was even lower than the bulk rates it was paying to Wapda.

The federal government, said these sources, was already picking up the deficit of the AJK government.

Bulk tariff (C-3) applied to AJK is around Rs3.66 per unit; average consumer tariff is more or less Rs3.34 per unit; and Wapda’s average purchase price is nearly Rs3.24 per unit.

Wapda sources said that the issue had emerged following the tariff determination announced by National Electric Power Regulatory Authority (Nepra) early this year that called for the removal of subsidies for AJK and the Federally Administered Tribal Areas (Fata).

These sources said that AJK did not submit its point of view to Nepra during the public hearing and has now been forced to enter into a complicated process.

AJK has separate tax collection mechanism and laws, including sales tax, because of its special constitutional status though it adopts various laws from federal government under the AJK provincial constitution of 1974.

AJK has separately asked Wapda to pay GST on electricity sells from Mangla Dam, but the same has also been referred to the federal government for advice, Wapda sources said.

AJK has longstanding demand for royalty on Mangla Dam on the pattern of Rs6 billion annual hydel profit being paid by Wapda to the NWFP.