PESHAWAR, Jan 10: The increasing unrest among 2,200 employees of town-1 of the Peshawar city district due to delay in payment of their salaries for the month of January eased off on Thursday after the town administration obtained a loan of about Rs8 million to disburse salary among its staffers.

However, the loan obtained on 10 per cent interest rate, is likely to make things more difficult for the town administration as it is already facing a Rs67 million deficit in its current year’s budget.

The town administration was unable to pay salaries due to a prolonged financial crisis which attained serious proportions in the second half of the current financial year.

Sources said the crisis worsened after the town administration was not provided its January’s share from the funds the provincial government receives every month from the centre for onward distribution among the district governments in lieu of octroi.

Senior government functionaries in the finance department told Dawn that the provincial government withheld he Peshawar city district government’s share in line with a decision of the Provincial Finance Commission (PFC).

The PFC award — which is in its first year of application — empowers the provincial government to deduct at source funds from the money transferred to the district governments every month in case Wapda resorts to recover district governments’ or their subordinate institutions’ electricity arrears through book adjustments from the amount payable to the province under different heads of payment.

The sources said that Wapda deducted at source Rs400 million from the NWFP government share during 2002 on account of electricity arrears payable by the Peshawar city district government.

In the light of the PFC’s recommendations, the sources said, the provincial government recently decided to start recovering the amount Wapda deducted at source from its income last year.

Initially, the Peshawar city district government’s entire monthly share of Rs36.8 million was withheld. However, the provincial government agreed to release half of the amount after the Nazimeen of the Peshawar city district government and the town-1 administration approached the provincial authorities.

“Though the payment of salaries on Thursday has improved the situation and the unrest among the 2,200 affected employees has ended, we would observe a strike if the delay occurs again next month,” said Malick Naveed Ahmed, Chairman United Municipal Workers’ Union, CBA, Peshawar.

He told Dawn that the municipal services would be brought to a halt if the employees did not receive salaries in time next month.

Haroon Bilour, the Nazim of town-1, held the district government responsible for the financial crisis faced by his administration.

“Whereas we (town-1 administration) have transferred some of our resource-generating heads to the union councils, district government has not assigned some of the important income heads to us apparently in violation of section 180 of the local government ordinance,” Bilour told Dawn.

He claimed that the income generation heads required to be transferred to the town-1 administration in line with the local government ordinance could fetch additional Rs140 million income every year to the town administration.

“Whereas, our major sources of income are not being transferred to us by the district government, we are told to pay 10 per cent interest over and above the loan we were constraint to obtain to pay the salaries,” said Bilour.

The situation was not likely to improve next month as far as the in-time payment of salary to staff was concerned if the town-1 did not receive its share in February (in lieu of octroi).

The monthly share of town-1, comprising a large area previously falling under the jurisdiction of the now abandoned Municipal Corporation, Peshawar, comes to around Rs6 million.

“If we don’t get the entire amount we would not be able to ensure in-time payment of salaries next month,” said an official of the town-1 administration.

The monthly wage bill of the town-1 is about Rs9.2 million, whereas its total monthly electricity expenditure comes to around Rs8 million.