PESHAWAR, Jan 7: The Water and Power Development Authority (Wapda) released another tranche of Rs1 billion to the NWFP under the head of net hydel profit easing off the provincial government's financial worries, said official sources.

The latest instalment rose the total amount released to the province, during the 2003-04 financial year, to Rs3 billion against the total annual capped share amount of Rs6 billion the provincial government is likely to get.

The provision of funds, said a source, improved the provincial government's cash balance position in its account- number-one with the state bank. "Though the cash balance is still in the negative, the provision of funds on the part of Wapda brought down the scale of funds the provincial government obtained from the State Bank of Pakistan as over draft against its account," said an official.

Provincial government(s) can obtain a maximum of Rs2 billion over-draft from the State Bank of Pakistan to meet expenditure requirements. The fresh instalment of net hydel profit brought down the amount over-draft close to Rs1 billion mark. The 15 per cent increase effected in the salary of provincial public sector employees in line with a decision of the federal government, premature retirement of part of the province's expensive cash development loan - payable to Islamabad - and en bloc payment of electricity arrears payable to Wapda by the provincial and district governments' entities compelled the NWFP government to heavily rely on the State Bank's over-draft facility during the current financial year.

"Though the fresh disbursement has eased off the financial worries of the provincial government to some extent, the relief appears to be temporary as the provincial government would again need to borrow more funds from the State Bank to meet its pressing expenditure in the months ahead," said the official source.

The source said that in line with its commitment with Wapda the provincial government was required to attach top priority to clear electricity arrears payable by its departments and local bodies institutions.

The province paid Rs1.3 billion, during the current financial year, to clear part of electricity arrears payable by its departments and local body institutions of the district governments. Still the provincial government owes to pay around Rs800 million to Wapda to clear the arrears.