PESHAWAR, June 22: The Khyber Pakhtunkhwa government is forming a jirga comprising all political parties to take up the issue of uncapping net hydel profit with the federal government.

“Net hydel profit is an important issue for us and we want to take everybody onboard for its resolution with the centre,” Chief Minister Ameer Haider Khan Hoti announced in the provincial assembly while winding up the budget debate on Wednesday.

In 1991, the federal government had capped the royalty payable to Khyber Pakhtunkhwa on hydel power generation at Rs6 billion. A tripartite tribunal uncapped the net profit in 2005 and asked the federal government to pay Rs24 billion, as yearly share, to the province with 10 per cent growth in the subsequent years.

However, this arrangement was scrapped two years ago and a technical committee appointed by Prime Minister Syed Yousuf Raza Gilani tasked to resolve the issue afresh. Until now, the committee has made no progress.

The chief minister told the house that provincial government had received Rs35 billion on account of Rs110 billion arrears of net hydel profit, while the third installment of Rs25 billion was expected this year.

He expressed optimism about the future of the province, saying “new discoveries of oil and gas are something raising our hopes.”

He informed the lawmakers that the province’s own oil and gas company would very soon launch joint venture with a foreign oil firm in southern districts, which had huge deposits of oil and natural gas. He said that the government would encourage public-private partnership in oil and gas sector.

Mr Hoti said that few years ago the province was getting Rs250 million royalty from the federal government on account of oil and gas which had now reached Rs15 billion annually.

He said that provincial government would spend Rs700 of the total royalty on uplift schemes in those districts where gas and oil were explored. He said that a foreign company exploring oil and gas had paid $1.5 million to government and that amount would be utilised on drinking water schemes in Karak district.

He urged MPAs of the southern districts to identify mega projects of major impact in their areas.

The chief minister said that his government would focus on hydel power generation in the province. In this connection, he said, ground breaking ceremony of two projects in Malakand division would be performed in January next.

He said that PC-I of the two projects were being prepared and would be sent to federal government for approval.

Terming terrorism one of the major challenges for the government, he reiterated that government would negotiate with those groups, who laid down weapons and accept the state’s writ.

Earlier, the assembly passed supplementary budget for the year 2010-11 after the house approved 51 demands for grants.

Speaker Karamatullah Khan Chagharmati adjourned the session for indefinite period.