PESHAWAR: Khyber Pakhtunkhwa has come up with three proposals to settle its longstanding issue with the centre over the nonpayment of Rs1.5 trillion net hydel profit dues from 2016 to 2022.
During the Jan 10 meeting of a special committee, the KP government proposed payment of outstanding NHP amounts in accordance with the Council of Common Interest’s decisions, granting control of Wapda’s power stations to province, and implementing an interim NHP payment agreement by enhancing consumer tariff by Rs1/Kwh to generate requisite funds.
The committee was formed by the CCI on Dec 23, 2019, to propose an “out-of-box solution” for the payment of NHP to the provinces. It has so far held five meetings.
The issue of Rs1.5 trillion NHP dues in line with the Kazi Committee Methodology (KCM) for the period of 2016-22 has been subject of prolonged negotiations since 2018.
Seeks NHP payments in line with CCI decisions, control of Wapda power stations
In its latest submission, KP has said the federal government should pay NHP in line with Article 161(2) of the Constitution, Presidential Order No 3, decisions of the CCI from 1991, 1993, 1997, 1998, 2016, 2018 and 2022, and the calculation made by the Jehanzeb Khan committee in the report approved by the CCI on Dec 23, 2019.
It added that the federal government should fund the power house component of Wapda development projects through PSDP instead of revenues generated through Wapda generation tariff to make funds available for the payment of the NHP to the entitled province.
The second proposal stated that the transfer of the Wapda hydropower station to provinces as proposed by the Punjab government and agreed by KP and decided in the third meeting of the out-of-box committee on Jan 11, 2022.
Besides, the proposal said that transfer of HPPs to provincial government on analogy of generation policy 1995 and 2015 and outstanding payment of NHP as per KCM to be made by the federal government till date of transfer of HPP to the provinces while the operation and maintenance can be retained by Wapda.
The third proposal stated till the finalisation of these two options, the federal government should announce the second interim agreement of NHP payment by enchanting the consumer end tariff by Rs1/Kwh to generate the requisite funds.
“Options may be finalised within a month,” the proposal read, adding that payment of NHP should be made directly by the CPPA-G through escrow account instead of Wapda.
It said that Pakhtunkhwa Energy Development Organisation projects should be facilitated to sell up to 1500 MWs of power through electricity wheeling while water use charges to be enhanced to Rs3/Kwh.
When contacted, Himayatullah Khan, the KP government’s representative tasked with negotiating NHP with the federal government, said that the province presented its proposal in the fifth meeting of the “out-of-box” committee, which was formed on December 23, 2019.
He said Article 161(2) of the Constitution declared that the net profits earned by the federal government, or any undertaking established or administered by the federal government from the bulk generation of power at hydro-electric stations shall be paid to the province in which the hydro-electric station is situated.
Mr Khan said that CCI was the relevant forum to determine net profits.
He said that after the numerous CCI decisions on the matter and recommendations of a committee led by deputy chairman of the Planning Commission Dr Jehanzeb for the payment of NHP in line with the KCM, the federal government came up with the excuse of having no money.
He, however, said that the power component of new hydro-electric stations was funded from Wapda revenues and the water component from the Public Sector Development Programme.
“The power component of Diamar-Basha, Mohmand and Dasu dams amounts to Rs2.24 trillion, while the water component totals Rs1.4 trillion. When the federal government says it has no money, KP’s contention is that the Rs2.24 trillion funneled Wapda into this project is our money,” he said.
The KP’s representative also said that the federal government’s stand that payment of NHP to the province would raise electricity prices was incorrect.
He said that the price of a unit of electricity had gone up from Rs18 to Rs60, while the circular debt had touched Rs2.2 trillion and that had nothing to do with the payment of NHP.
In April 2018, the KP government had taken the implementation of KCM, adopted by the CCI in 1991 and the forum constituted a committee to deliberate upon the issue of determination of rates/net profits in light of the decision of CCI.
The committee presented its report to the CCI on December 23, 2019, which stated that practicality of the implementation of the KCM couldn’t override the constitutional dictates and the rise in the price of electricity was a matter of public policy and couldn’t be given preference over Article 161(2).
It added that the federal government should ensure payment of NHP on the basis of calculations made by the committee for 2016-17.
The KP government has calculated NHP dues at Rs1.5 trillion as per KCM for the period from 2016-17 to 2022-23.
Published in Dawn, January 14th, 2025
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