PESHAWAR, April 9: The NWFP government and the Peshawar city district government jointly raised a sum of Rs6 million to help Town-1 pay its staff salaries, ending a stand-off between the town municipal administration and its over 2,200 employees.

The provincial finance department has released Rs3 million to the Town-1 administration out of its share in grant extended to the local governments by the federal government in lieu of octroi and zila tax.

Besides, the Peshawar city district government released an amount of Rs3 million to the Town-1 administration out of town’s share under the operational grant the district government would be distributing among its four town municipal administrations during the current financial year.

The stand-off attained serious proportions after the capital city police teargassed and batoncharged a protest rally of Town-1 employees on Monday to condemn non-payment of salaries.

Sources said to ensure timely payment of monthly salaries in future to Town-1’s over 2,200 employees, the provincial government had held out the assurance that the town municipal administration would not be subjected to at-source deduction from its monthly share of funds provided to it in lieu of octroi and zila tax. “We have been assured of regular and full payment of our share on account of funds in lieu of octroi and zila tax by the provincial government,” said Haroon Bilour, Nazim of Town-1.

The resource constraints hit Town-1, whose monthly salary bill comes to about Rs9.2 million, and is facing a budgetary deficit of Rs50 million during the current financial year.

The Rs3 million released by the Peshawar city district government would be adjusted against the Rs5 million operational grant the town would receive from the district government during the current financial year, official sources said.

Mr Bilour expressed the hope that the town municipal administration would be able to pay salaries on time from now onward after the provincial government’s decision to release full amount of funds in lieu of octroi and zila tax in future.

The finance department deducts an amount from the funds of local governments to recover the amount Wapda deducted from the provincial government’s share to recover electricity arrears.

Wapda deducted at-source Rs585 million from the NWFP government during the 2001-02 financial year on account of recovering electricity arrears payable by the district governments and town municipal administrations.

The Provincial Finance Commission authorises the provincial government to recover the funds (from the district governments and town municipal administrations) deducted at-source from it by Wapda on account of electricity arrears payable by the local government institutions.

The provincial government, said the sources, had assured the district government that Town-1 would not be subjected to at-source deduction in view of its increasing financial constraints.

The availability of Rs6 million, said the sources, raised the funds available with Town-1 to over Rs10 million making it possible to clear the Rs9.2 million staff salary for March.