12 November 2004	Friday	28 Ramazan 1425

ISLAMABAD, Nov 11: The federal government has guaranteed that the ownership rights of all hydroelectric power projects in Azad Kashmir would be transferred to the AJK government free of cost after completion of 25 years of their operation, sources told Dawn.

The decision has come three years after the Water and Power Development Authority signed memorandums of understanding with the sponsors of two 210MW projects under which those would be transferred to the power utility after 25 years of their operation.

The Economic Coordination Committee of the cabinet last week decided, as a first step, to transfer to the AJK government the ownership of the 79MW New Bong Escape and the 132MW Rajdhani power projects after the completion of 25 years of their operation.

The ECC decided that the same dispensation should be allowed to all the private hydroelectric projects located in AJK where the provision for transferring those to the government was envisaged.

Under the 1995 hydropower policy, the sponsors of the New Bong Escape Project, Laraib Energy, and the Rajdhani project, Iqbal Power, were issued letters of support in 1995 by the AJK government.

The two projects would sell electricity to Wapda at a tariff of 3.1 cents per unit after their commercial operations start in June 2006.

Subsequently, the projects' sponsors also signed MoUs with Wapda that stipulated that their ownership should be transferred to the authority free of charge 25 years after their commercial operation begins.

The AJK government objected to the transfer of the projects' ownership to Wapda on the ground that Section 4 of the AJK Alienation of Land Act 1995 (Bikrimi), no immovable property within Azad Kashmir could be transferred in favour of any non-state subject.

The AJK government contended that the federal government, Wapda or any other corporation or company did not fall within the definition of 'state subject'.

After a long drawn controversy, the ECC ruled last week that since AJK had adopted the federal government's hydroelectric power policy, the word 'government' in its adopted policy meant AJK and not Pakistan government.

Hence, the committee decided, all the hydropower projects based in AJK would stand transferred to the AJK after the expiry of initial 25 years of the contract period.

Wapda's contention that since it was the purchaser of energy from the projects, it had a right to claim ownership of the plants at the end of the concession period was found without any justification.

The ECC was convinced that if Wapda's stand was accepted on the basis of purchase of a product for a period, purchasers of petroleum would claim ownership of petroleum resources and people renting a residential facility could claim its ownership after a certain period.

The New Bong Escape project is located near Mirpur on river Jhelum downstream of Mangla and the Rajdhani project is on river Poonch in AJK.