PESHAWAR, Jan 9: Following the federal government's assurance to facilitate the arbitration process between NWFP and Wapda over the contentious issue of net hydel profit, the NWFP government is likely to retract from its earlier announced hard line when it linked the signing of the new national finance commission (NFC) award with the resolution of its grievances.

Well-placed official sources told Dawn on Friday that in the light of the assurance, the provincial government is not likely to adopt the hard course to get its voice heard.

The provincial minister for finance, planning and development Siraj-ul-Haq had announced, a few days back, that NWFP would not sign the new NFC award till the time its demands vis-a-vis net hydel profit issue were looked into through a meaningful dialogue with Wapda under the auspices of the federal government.

Besides, NWFP has also lodged a claim of Rs 345 billion arrears accumulated against Wapda due to non-payment of annual share on account of net hydel profit to it between the 1973-74 and 1990-91 financial years.

Responding to the stand adopted by the provincial government, the federal finance minister Shaukat Aziz, in a meeting with the provincial chief minister Akram Khan Durrani at Islamabad - two days before the Muttahida Majlis-i-Amal and PML(Q) signed the agreement on the LFO - assured him that NWFP's differences with Wapda would be resolved through arbitration.

Official sources said that provincial government, at present, had focused on starting preparations for the arbitration process likely to be launched shortly following the nomination of an arbitrator by the federal government and one representative each of the provincial government and Wapda by them, respectively.

The provincial government wanted the federal government to resolve the issue before March 31, 2004, the cut off date announced by the federal finance minister for finalising the new NFC award.

"The provincial government cannot justify its tough stand linking the signing of the new NFC award with the resolution of the issue because arbitration is a lengthy process and would require at least one year to arrive at a conclusion," said the officer holding the important assignment.