ISLAMABAD: Khyber Pakhtunkhwa on Tuesday asked the centre to pay at the earliest Rs300 billion — allegedly stuck up for more than six years on account of net hydro power profits, speedily clear its development projects and accept its constitutional right over oil and gas reserves.

The federal government team led by Finance Minister Ishaq Dar promised to extend all possible support to the provincial government for its economic uplift schemes and resolve the issue of net hydro power profits on account of Tarbela dam through a high-level committee early next month.

KP Chief Minister Pervez Khattak had a meeting on Tuesday with the federal ministers for finance, petroleum and water and power.

An official of the provincial government told Dawn that at the time of finalisation of 7th National Finance Commission (NFC) award in 2009, the centre had promised to uncap provincial share in hydro power profit over Tarbela dam from Rs6bn per annum and increase it to Rs10bn immediately and then set mechanism for increasing it to Rs28bn the following year along with some arrears.

He said the then PPP government had paid Rs10bn in the first year of Awami National Party’s government in KP but then these payments were totally blocked by the centre and Wapda. As a consequence, the KP was even deprived of its previously capped share of Rs6bn instead of getting increased share. The total arrears since then have been estimated at about Rs300bn, he said.

The province also demands share in oil, gas reserves

Sources said Mr Khattak lodged his protest over harsh attitude of the federal government despite innumerable sacrifices rendered by the people of KP in war against terror over the past decade.

The statement said in the meeting that lasted for over two hours, the KP leader “at the outset mentioned about outstanding payment of net hydro power profit to KP”.

It was agreed that the issue would be taken up by Ministry of Water and Power on priority basis with inputs from National Electric Power Regulatory Authority (Nepra) and Wapda to propose workable options.

A meeting to this effect would be held in March with due representation from KP. All other issues related to Ministry of Water and Power and KP would be discussed at working level meetings, proposing the way forward, the statement said.

An official said the KP chief minister also asked the centre to accept its constitutional right over 100 million cubic feet of gas per day. He said the 50 per cent of this gas had been allocated for direct use by the industry and remaining 50pc for generating electricity for dedicated supply to special industrial zones.

He said the industry in that province had become unviable because of security situation and energy costs and investors were now moving out to other provinces and countries. He also complained against non-transfer of mandatory 2.5pc share in fresh oil and gas exploration blocks.

He said the provincial government’s requests for no-objection certificates over hydro power project and other development projects like metro bus service were being put in the cold storage while similar projects in Lahore were being facilitated.

Mr Dar appreciated development projects undertaken by the province but reminded that there had to be proper consideration and approval by Executive Committee of the National Economic Council (Ecnec) which was the right forum for this purpose.

He said the federal government would like to initiate a consultative process between the centre and provinces for the purpose of allocation of funds for projects as prioritised by the provinces themselves.

He also opined that the KP government could surrender projects which it deemed non-beneficial and accordingly the funds could be redirected to other priority areas. The KP side welcomed the suggestion.

The KP chief minister also requested for sovereign guarantees in regard to h ydro or other IPPs owned by the government of KP for projects above 50MW. It was decided that the centre will facilitate the province in the matter so that financial close of the projects could be conveniently realised.

The finance ministry statement said the Chairman FBR was directed to liaise with the representatives of KP government and propose workable solutions for all tax related problems.

Pervez Khattak on this occasion voiced KP’s interest to be incorporated in the energy corridor to benefit from the number of projects being undertaken under it. The finance minister expressed support in this regard reiterating centre’s true national spirit and obligation to extend support to all the provinces.

Published in Dawn February 25th , 2015

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