May 31, 2007	Thursday	Jamadi-ul-Awwal 14, 1428

PESHAWAR, May 30: The NWFP government is experiencing indecision over the actual volume of receipts to be projected in the next budget on account of net hydroelectric (hydel) profit, officials said.

Dawn has learnt that the officials involved in finalising budgetary proposals for the next financial year are split between two approaches. Some hold the view that since Wapda pays Rs6 billion annually to the NWFP as its share in net profit against hydropower generation since 1991-92, the revenue projection should follow this trend.

However, other officials advocate realistic revenue projection on the grounds that high projections result in a shortfall every year. This, they say, affects the provincial government’s overall financial management and medium-term budgetary framework (MTBF).

In the current financial year, the NWFP government will sustain a revenue shortfall of Rs2 billion for hydroelectric power generation since Wapda is still making payments on the basis of the Rs6 billion capped amount against the provincial government’s projected Rs8 billion.

Official sources said that the finance department has sent a summary to Chief Minister Akram Khan Durrani on the matter.

The summary recommends that the receipts for net hydroelectric profit should be projected at Rs6 billion to avoid a deficit in the next budget.

However, some financial managers argue that a revenue projection along these lines will indicate that the NWFP government has accepted Wapda’s stance. They believe that the receipts’ projection should not be lower than the one calculated by an arbitration tribunal.

In a judgment handed down last year, the arbitration tribunal had bound Wapda to pay Rs110 billion to the NWFP in 5 yearly instalments, on account of hydroelectric arrears.

The tribunal also declared that the province’s share will grow at an annual rate of 10 per cent.

The judgment was challenged in a civil court by Wapda, after which the NWFP government moved the Supreme Court. A judgment in this regard is still pending.

“The provincial government should reflect Rs26 billion in the next budget because the Rs6 billion projection will negate the tribunal’s judgment,” argued an official.

He explained that Rs6 billion should be included in actual expected receipts while Rs20 billion should be projected as additional receipts to be used on special development projects, if received within the next financial year.