PESHAWAR, Feb 21: Provincial representatives at the National Finance Commission meeting here on Saturday sought time to consult their governments about the proposals on devising a criteria for resource distribution.

According to sources, the NFC meeting discussed in detail the proposals put forth by provinces in respect of setting 'determinants' for the distribution of resources among them from the federal divisible pool (FDP) under the next NFC award.

"But the meeting fell short of narrowing down their differences on this question," said a credible source.

An indication to this effect was also given by Finance Minister Shaukat Aziz who told reporters afterwards that the representatives of federating units wanted to consult their governments over the recommendations discussed during Saturday's meeting.

"Finalizing an NFC award in an amicable manner requires a step-by-step approach and a block building process," he said.

He said considerable progress had been made viz-a-viz developing a consensus on what should be the multiple indicators for the distribution of resources among provinces.

However, an informal session of the NFC members held in the morning failed to develop a consensus on the issue.

In the morning session, according to some sources, Balochistan, Sindh and the NWFP representatives managed to develop an understanding on this matter, but Punjab representative had an objection. Therefore, they could not take something substantive to the NFC meeting.

Nonetheless, a senior federal government official said that it would be wrong to say that they (provinces) were being divergent in their approach.

"Rather, there is convergence as they have agreement on so many things," said the official.

The provincial representatives, in their informal meeting, were clearly divided into two groups, with nobody ready to show flexibility in his stand, sources claimed.

This informal session delayed the start of the formal NFC meeting by more than two hours. A similar session on Friday had failed to hammer out an agreement, so the participants decided to meet again.

In their joint press conference, held following the NFC meeting, the provincial representatives agreed with the stand adopted by the federal finance minister that things were moving in the right direction.

"Considerable progress has been made in the Peshawar meeting, giving rise to hope that during the course of next few meetings the award would be finalized," said Mr Aziz.

NWFP's finance minister Siraj-ul-Haq, Sindh's non-statutory member on the NFC Mr Lodhi, Punjab's finance minister Hasnain Bahadur Dareshak and Balochistan's finance minister Ehsan Shah also addressed the press conference, expressing their optimism that consensus would be achieved to evolve an award acceptable to all.

Mr Shaukat Aziz said that in line with the recommendations of provincial representatives, the process of holding formal and informal meetings of the NFC would be accelerated to achieve the target of finalizing the next NFC award by March 31, 2004.

The next NFC meeting is to take place in Quetta, following which frequent rounds of talks would be held at Islamabad to finalize the five-year award.

Mr Aziz said the report on gas development surcharge (GDS) - prepared with mutual agreement by the governments of Sindh and Balochistan - was presented before the NFC meeting.

A final decision on it would be taken after Punjab and Sindh governments present their recommendations on it.

"Though Sindh and Balochistan are the main stake-holders as far as the GDS issue is concerned, it was deemed necessary that Punjab and the NWFP should give their input because commercial production of gas in the Frontier province would shortly commence. So both the provinces should also agree with the other two provinces," said Mr Aziz.

He expressed the hope that Punjab and the NWFP would also agree with the contents of the agreement reached between Balochistan and Sindh, settling the issue once and for all.

About the net hydel profit issue, involving the NWFP and Wapda as the main parties, Mr Aziz said the federal government was committed to facilitating arbitration between the two sides to resolve the matter.

The NWFP had submitted the names of its nominees, while Wapda and Centre would shortly nominate their representatives to ensure that the process was launched before finalizing the next NFC award.

He said the matter also came under discussion in his meeting with the provincial chief minister Akram Khan Durrani and provincial finance minister Siraj-ul-Haq here on Saturday.

He recalled that he had indicated in a previous meeting that the federating units' cumulative share under the FDP would be raised to 45 per cent or thereabouts.

Consultations on the subject were still going on at the NFC platform. But one thing was for sure that provinces would get their share raised from the existing level of 37.5 per cent, he added.