Govt to collect hydel profit arrears from consumers

Agreeing to settle the two decades old issue of net hydel profit, the federal government on Thursday calculated an amount of Rs 70 billion in arrears for the Khyber Pakhtunkhwa, however, it will be provided only if the WAPDA’s tariff petition for recovery of arrears is approved by the NEPRA.

The first installment of Rs 25 billion will be collected during the current financial year and Rs 15 billion each in the next three financial years. The decision was reached at a high-level meeting chaired by Finance Minister Ishaq Dar on Thursday which had detailed deliberations on the issues between the federal government and the government of Khyber Pakhtunkhwa (KP). The successful discussions led to signing of an MoU for resolving the decades old issues which to date had been overlooked by successive governments, a statement of ministry of finance said.

Minister for Water and Power Khawaja Mohammad Asif was also present in the meeting. Chief Minister KP Pervez Khattak along with his cabinet colleagues and senior officials represented KP on the occasion. The meeting at the outset discussed the matter concerning payment of net hydel profit (NHP) and net hydel arrears to KP. It was decided that the uncapped NHP as determined by Nepra would be notified immediately by the ministry of water and power.

Accordingly, a total amount of Rs 70 billion was agreed 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. The meeting also decided that WAPDA after seeking concurrence of CCI through ministry of water and power would file a tariff petition for recovery of arrears in four installments, first installment of Rs 25 billion in current financial year and Rs 15 billion each in the next three financial years.

The meeting also discussed matters regarding Pehur Hydro Power Project owned by the KP government. It was agreed that a Power Purchase Agreement (PPA) would be signed by CPPA-G latest by 31 March this year which would incorporate a mechanism for recovery of outstanding amounts. Considering the matter regarding allocation of gas for power generation, it was decided that the federal government would allocate 100 MMCFD gas to the KP government for use in power generation either at its own or through partnership with the private sector.

Regarding Chashma Right Bank Uplift Canal project in KP, it was agreed that the feasibility of the project would be carried out afresh by the ministry of water and power and the government of KP in coordination with the planning and development division. Upon approval, the project would be co-financed by the federal and KP governments with a 65-35 ratio. The KP government would also bear the operation and management and recurring costs of the project. It was also decided in the meeting that the issues of Workers Welfare Fund (WWF) relating to KP would be duly addressed by the federal secretary HRD on priority.

Later, Finance Minister Ishaq Dar giving details to media about the agreement said that successful talks were reflective of the policy of reconciliation followed by the present government. He said the issues which were overlooked by many governments in the past, were finally resolved by the government. He appreciated the active participation of Minister for Water and Power Khawaja Asif and the positive contribution by the chief minister KP in resolving the issues.

KP Chief Minister Pervez Khattak thanked the federal government, especially Finance Minister Dar, for the deep interest he had evinced in addressing the lingering problems.