Home / Business / Khyber Pakhtunkhwa to get Rs40bn hydel profit next month

Khyber Pakhtunkhwa to get Rs40bn hydel profit next month

PESHAWAR: The federal government is set to pay the Khyber Pakhtunkhwa government Rs40 billion from the province’s Rs65 billion share in net profit and its arrears projected for the current fiscal, officials said.

A senior official of the finance department told Dawn that the payment was likely to reach the province next month.

He said the department had projected the net profit for hydel power generation in financial year 2018-19 at Rs39.98 billion and the relevant arrears at Rs25.29 billion totaling over Rs65 billion.

Regarding the payment of the Rs25 billion arrears, the official said the province was likely to get details in that respect from the centre within a week.

The KP government has also been pressing the federal government to implement the AGN Kazi formula to calculate the net hydel profit proceeds eyeing a surge in payments from Rs20 billion to Rs200 billion by 2023.

Province claims Rs65bn payment from centre in current fiscal

Both governments are currently holding talks on the issue.

The Council of Common Interest had examined in April and Sept this year the implementation of the AGN Kazi formula for calculating profits on hydroelectricity production and formed a committee to determine the NHP figures under that formula.

On March, 2013, the then Pakistan Muslim League-Nawaz-led federal government and the Pervez Khattak-led provincial government had agreed to uncap the province’s net hydel profit proceeds and the payment of Rs70 billion to the province on account of the arrears of uncapped NHP after the reconciliation of mutual claims in the power sector and as full and final settlement.

Following the agreement, the province’s uncapped net hydel profit has gone up considerably.

The province received Rs18.7 billion hydel profit in the financial year 2015-16, Rs20 billion in 2017-18 and Rs28.78 billion for the current fiscal.

Of the Rs70 billion arrears, the provincial government has received the first and second tranche of Rs25 billion and Rs15 billion for the 2015-16 and 2016-17, respectively.

However, the Water and Power Development Authority has yet to release two tranches of Rs10 billion and Rs15 billion for 2017-18 and 2018-19, respectively.

Last week, Khyber Pakhtunkhwa Chief Minister Mahmood Khan met Prime Minister Imran Khan in Islamabad and requested him to resolve the issues regarding the payment of net hydel profit and its arrears to the province and the implementation of the AGN Kazi formula for the purpose.

“Mahmood Khan briefed the premier about the NHP issues and asked him to resolve this issue under the AGN Kazi formula,” a government statement issued here had said, adding that the premier assured the chief minister of the resolution of issues about the payment of NHP and its arrears under that formula.

The finance department’s White Paper 2018-19 said the KP government believed that the AGN Kazi committee’s methodology to determine net hydel profit, which was duly approved by the CCI, was neither implemented by Wapda nor was it honored by the federal government.

It called for the implementation of that formula.

“Since the aforementioned arrangement being interim; therefore, the provincial government decided to approach CCI for implementation of KCM and related issues which are now under consideration by committee constituted by CCI in its meeting on April 24, 2018 to deliberate the issue for determination of rates in accordance with KCM,” the white paper said

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