PESHAWAR: The Khyber Pakhtunkhwa government has formally asked the federal government to task the proposed committee of the Council of Common Interests with finding ways for the early payment of net hydel profit to the provinces instead of determining the rate for it afresh.

Sources told Dawn that KP Chief Minister Mahmood Khan recently informed Prime Minister Imran Khan about the province’s concerns regarding the NHP issue, which also came under discussion in the CCI meeting on Dec 24, 2019, in a letter.

They said the Khyber Pakhtunkhwa government had yet to receive response.

The sources said in the CCI meeting, a committee headed by Planning Commission deputy chairman Dr Jehanzeb Khan presented its report regarding the determination of NHP rates and endorsed the position of KP, which demanded around Rs128 billion annual hydel profit in line with the formula formulated by the AGN Kazi committee.

Calls for early payment of dues

They said Khyber Pakhtunkhwa had informed the centre that the recommendations of the Dr Jehanzeb committee had no mention in the minutes of the CCI meeting, while the minutes also didn’t truly reflect the decisions made in the meeting.

An official told Dawn that the province had formally asked the centre to change the wording of the minutes.

The CCI minutes available with Dawn state that after deliberating the issue of NHP and Kazi committee formula, the forum endorsed its previous decisions on the subject but it decided to form a committee of technical and financial experts to propose an out-of-box way to determine the hydel profit for payments to the provinces.

The official said the KP government was of the view that the forum had agreed to find an out-of-box solution to the issue instead of deciding the already-determined rate for payments.

“Our position is clear on this issue. The Dr Jehanzeb committee’s report was final, so the centre should talk about the payment of our due share of profit instead of needlessly discussing the payment rate,” a senior provincial official told Dawn.

The committee had recommended in its report that the federal government being the guarantor of the Distribution of Electricity Profit to Provinces Order, 1991, should ensure the payment of the due hydel profits to KP and Punjab.

It had also noted that the provisions of the Constitution’s Article 162(2) were unambiguous declaring that net profit earned by the federal government shall be paid to the province in which a hydroelectric station is located.

According to the committee, several decisions taken over almost three decades by the constitutional forums, including the National Finance Commission, federal cabinet, the CCI and Supreme Court regarding the net hydel profit payments couldn’t be reviewed as they settled the issue to the satisfaction of the provinces and the centre.

Article 154 (7) of the Constitution offered the joint session of Parliament as a remedy in case any party is dissatisfied with the CCI’s decision.

In the 37th CCI meeting, which was held on April 24, 2018, the then prime minister, Nawaz Sharif, had underlined the importance of the reconciliation of figures payable to the provinces and approved the formation of a committee headed by the then Planning Commission deputy chairman to determine the rate for the payment of net profit and submit recommendations to the forum.

The technical committee said in its report that 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.

In Feb 2016, KP and centre agreed on an interim agreement to uncap net hydel profit from Rs6 billion, which the province had been getting since 1991.

Both sides also agreed on the payment of Rs70 billion to KP as arrears of the uncapped NHP after reconciliation of mutual claims in power sectors by both sides.

They also developed consensus on the payment of that amount to KP in four Rs25 billion installments in 2015-16 and three Rs15 billion installments in the next three years.

Published in Dawn, February 8th, 2020