MUSHTAQ GHUMMAN
ISLAMABAD: The Ministry of Water Resources is to submit a new Net Hydel Profit (NHP) formula to the Council of Common Interests (CCI) in its forthcoming meeting along with financial implications of the AGN Kazi committee methodology on Wapda in the case of Khyber Pakhtunkhwa (KP), well-informed sources told Business Recorder.
The new formula has been finalised by a committee comprising Secretary Finance, Secretary Planning, Development and Reforms, Water Resources and Secretary Power Division.
Chief Minister KP, Pervez Khattak at a recent CCI meeting raised the issue of the methodology used by the AGN Kazi committee and requested that the issue should be discussed in the CCI as it is a growing demand of his government.
An official told this scribe that KP is getting NHP amount as per the Memorandum of Understanding (MoU) signed between the KP government, federal government as well as Water and Power Development Authority (Wapda), adding that implementation on AGN Kazi methodology is not applicable.
According to the MoU, KP is being paid NHP at the rate of Rs 1.10 per unit but the provincial government began raising AGN Kazi formula to get NHP at Rs 5.38 per unit, which is 390 per cent higher than the current methodology.
In 2015, federal government and KP governments had reached an “interim settlement” under which NHP increased from Rs 6 billion to Rs18.8 billion a year at the rate of Rs1.10 per unit of bulk electricity supply.
An official said that total amount of Rs.70 billion has been agreed upon on account of arrears of uncapped NHP after reconciliation of mutual claims in the power sector between the two governments as full and final settlement.
NWFP’s total claim against Wapda amounted to Rs595.6 billion, including a principal amount of Rs293 billion and mark-up of Rs302.7 billion calculated since 1991. However, the Chairman of the tribunal did not accept the claim for mark up on legal grounds.
In his 87-page award, Justice Ajmal Mian adopted the base amount of NHP at Rs6.088 billion for the year 1989-90 as reported by a committee of the National Finance Commission on the instructions of the CCI on Jan 12, 1991.
The committee had also agreed to a 10 per cent increase in hydel profit for future computation of the A.G.N. Kazi formula. Justice Ajmal Mian computed the total amount of NWFP’s net hydro profit since 1991 at Rs193.763 billion. Of this, Wapda had over the years paid Rs83 billion
According to sources Prime Minister, Shahid Khaqan Abbasi directed that this issue may be included in the agenda of the next CCI meeting.
“The NHP formula is quite exhaustive though yet to be finally approved by the CCI. This is not part of the National Water Policy. It’s another issue and CCI is to take it up separately in its upcoming meeting,” said one of the senior officials on condition of anonymity.
Chief Minister, KP had also taken up this issue with the erstwhile Ministry of Water and Power and Ministry of Finance but did not receive any positive response. KP government had also sought implementation on the basis of AGN Kazi formula in June last year during a hearing of Wapda hydroelectric tariff petition.
