PESHAWAR: The Council of Common Interests has formed another committee to resolve the issue of the payment of net hydel profit (NHP) to Khyber Pakhtunkhwa and Punjab in line with the AGN Kazi formula, sources said.

The development came during a meeting chaired by Prime Minister Imran Khan and attended by all provincial chief ministers in Islamabad on Monday.

Officials claimed that the report of a committee that was headed by Planning Commission deputy chairman Jehanzeb Khan and favoured KP’s claim for NHP dues was discussed during the CCI meeting.

The report declared, “the issue of practicality of [Kazi methodology] implementation, though raised by some members of the committee, cannot override the constitutional dictates.”

The officials said the Jehanzeb Khan-led committee took 18 months to make recommendations on the payment issue but the CCI preferred to form a new panel on it.

KP officials insist centre deliberately delaying payments

They claimed that the federal government was deliberately delaying the hydel profit payments to the provinces, especially KP.

The officials said the CCI directed the committee to come up with an out-of-box solution of the matter under the AGN Kazi formula, which amounted to the reviewing of that formula, a violation of the CCI’s mandate and the provision of the Constitution.

Adviser to the chief minister on energy and power Himayatullah Khan told Dawn that the proposed committee was not meant to reopen the award and instead, it was formed to determine from where the money to pay the provinces’ NHP claims would come.

He said the formation of a new committee had delayed the resolution of the issue.

The minister said it was a five decades old issue, so it would be too simplistic to think that sacks filled with money would be coming to province after a couple of meetings.

He said the out-of-box solution was in reference to identify the sources of payments to the provinces.

“This committee will deliberate on how to get the money to pay KP,” he said, adding that one way of doing it is to burden consumers and the other is to overcome the system’s inefficiencies and control waste of power.

However, the sources said federal minister for power Omar Ayub Khan opposed KP’s contention claiming there was no money in the power sector.

He said following discussions, the forum decided that since both sides were not on the same page, another committee would be formed to find an out-of-box solution of the issue.

The source pointed out that the CCI couldn’t undo previous decisions and if that was required, only a joint sitting of parliament was authorised to do it.

“By forming another committee, the CCI has overreached its mandate,” he said.

The official said the NHP proceeds along with royalty on oil and gas was the main source of revenue for the province.

He said Article 161(2) of the Constitution and explanation given thereunder unambiguously laid down the guidelines for the calculation of the NHP.

“The CCI in its meeting held on Jan 12, 1991, approved the KCM to determine NHP for the past and future leaving no room for doubt,” he said.

The official said the forum repeatedly endorsed the same methodology for profit calculation in its meetings dating back to 1993, 1997, 1998, 2016 and 2018.

He said the Supreme Court had upheld the Jan 1991 CCI decision for the payment of NHP to provinces.

In the 37th CCI meeting, which took place on April 24, 2018, the then prime minister, Nawaz Sharif, had underlined the importance of reconciliation of figures payable to provinces a committee headed by deputy chairman Planning Commission to deliberate upon the issue of determination of rates/net profits and submit its recommendations in the next meeting of the forum.

The first meeting of the committee took place on Oct 26, 2018, where it formed a technical sub-committee to assist it.

The technical committee in its report said KP and Punjab’s hydel profit claims for 2016-17 of Rs128 billion and Rs52 billion respectively were based on the original Kazi Committee formula.

Published in Dawn, December 27th, 2019