PESHAWAR, Aug 25: The NWFP government's budgetary claim of Rs18 billion under the head of net hydel profit for 2004-05 represents a departure from past practice when the province used to base its annual projection under this head in accordance with the AGN Kazi formula.
The province has laid claim to a total of Rs18 billion on account of net hydel profit for the current financial year. This includes a sum of Rs8 billion likely to be received from Wapda.
Another amount of Rs10 billion has been reflected as arrears likely to accrue at the end of the current financial year from this head. "Overall, the province has laid claim to an amount of Rs18 billion of which it expects to receive only Rs8 billion. The rest it has projected as arrears," said a provincial government official.
The claim is a departure from past practice and is likely to undermine the NWFP's stand on the issue of determining net hydel profit, according to official sources. Since early 1990s, the province has been making budgetary projections for this head on the basis of a formula hammered out by a special committee of the federal government headed by Mr AGN Kazi.
The committee had been constituted to determine provinces' annual net hydel profit share in fulfilment of a provision of the constitution that entitles federating units to get share every year from the net profit accruing from the sale proceeds of hydel power generated by power stations situated in their territory.
In accordance with the formula, provinces' share under this head needs to be raised by 11 per cent every year from previous year's share. However, this practice has not been followed this year, and the province's claim is less than the amount it is entitled to in accordance with the AGN Kazi formula.
A sum of Rs17.653 billion had been projected under last year's provincial budget as likely receipts under the net hydel profit. The figure was based on the AGN Kazi formula.
In this way, according to the sources, the province was supposed to lay claim to an amount of over Rs19.5 billion by effecting an 11 per cent increase over last year's budgetary projection.
Defending the provincial government, its senior finance managers, when contacted, said that the move would not harm the stand of the province. They said that the province was in the process of entering into arbitration with Wapda to settle the decades-old dispute of calculating its annual net hydel profit share.
While the province has been demanding its annual share on the basis of the AGN Kazi formula, Wapda is of the view that the NWFP is entitled to only Rs6 billion every year in line with a decision of the Council of Common Interest.
Haji Mohammed Adeel, vice-president of Awami National Party and a former finance minister of the province, said that the move had weakened the NWFP's case. "How would they defend their case after they have given up the province-friendly AGN Kazi formula," said Mr Adeel.
Senior finance managers said that the move had been made with a view to avoiding budgetary complications - a point supported by Mr Abdul Akbar Khan, parliamentary leader of PPP (Parliamentarians) that forms part of the combined opposition in the provincial assembly.
Mr Khan said on being reached that there was no utility of projecting the share on the basis of AGN Kazi committee's formula."The province has not received a share beyond Rs6bn (in a year) for the last several years, so it was no use projecting the figure on a higher side," said Mr Khan.
He, however, replied in the negative when asked if he supported the provincial government for ignoring the AGN Kazi formula. "They would not even get Rs8 billion because there is no commitment from Wapda or the federal government in writing in this respect," said Mr Khan - a point also endorsed by ANP's Haji Adeel.
Haji Adeel said that in its medium term budgetary framework (MTBF) - a document submitted to the World Bank in connection with a loan agreement - the provincial government had also reflected likely receipts of Rs8 billion under net hydel profit for a period of four years staring from July 1, 2004.
"They (the provincial government) have scrapped the AGN Kazi committee formula and it is evident from the MTBF," said Mr Adeel. While Mr Khan termed the move a compulsion for the provincial government to put its budget in order, Haji Adeel was not convinced, saying the ANP would resist it.
"Even the finance minister of NWFP's last military-backed civil government was more sincere than the incumbent finance minister," said Mr Adeel. The province, he maintained, kept relying on the AGN Kazi formula when it came to project NWFP's claim in the annual budget. "The people of this province would never forgive the sitting government for giving up the stand successive provincial governments had taken," said the ANP leader.