Federal, Sindh govts lock horns over cut in resources of provinces


—PTI govt proposes 3pc share for FATA’s development after reducing provincial share in NFC award

—Sindh accuses federal govt of exceeding its authority, interfering in provincial matters

—Cabinet decides to renegotiate ‘costly’ LNG deals

ISLAMABAD: The federal government Thursday decided to appropriate three per cent share to erstwhile FATA in the National Finance Commission (NFC) Award by reducing the share of the provinces, prompting the Sindh government to accuse Imran Khan-led government of exceeding its authority.

Addressing a press conference after a meeting of the federal cabinet chaired by Prime Minister Imran Khan, Information Minister Fawad Chaudhry said that the cabinet had decided that the provinces would have to forego their shares in the NFC award to give three per cent for FATA’s development.

The information minister, flanked by Petroleum Minister Ghulam Sarwar, further said that under the prime minister’s economic vision, development of Balochistan and Karachi were the top priority of the government.

He said there were complaints that the funds given for the development of Karachi were not properly utilised. Karachi’s transformation into a fully developed city, he said, was an important agenda of the PTI government as it was crucial for the country’s progress.

“A high-powered committee headed by Sindh Governor Imran Ismail has been constituted to ensure proper use of the development funds given by the federal government for Karachi,” he added.

Fawad said that after a long time, the metropolis had now come out of ethnic politics and it was the responsibility of PTI to live up to the expectations of its people, adding that the provincial government would also be taken on board on the funds released by the federal government for the uplift of Karachi.

The minister said that the federal government had decided to hand over administrative apparatus of tribal areas to the chief minister secretariat in Khyber Pakhtunkhwa by abolishing the FATA secretariat.


Taking exception to the announcement over the proposed cut in the NFC award, Sindh government’s adviser Murtaza Wahab said that reduction in the quota reserved for provinces was beyond the authority of the federation.

Accrediting the Pakistan People’s Party (PPP) for the merger of FATA with Khyber Pakhtunkhwa (KP), he said that PPP was the biggest supporter of development and progress of FATA, however, it was not right to deprive the ‘underdeveloped provinces’ of their due share of resources in the name of FATA’s development.

He also said that by forming a task force for Karachi’s development, the federal government was interfering in provincial matters.


Furthermore, the federal cabinet in its Thursday’s meeting decided to renegotiate the terms and conditions of unjustified deals pertaining to the Liquefied Natural Gas (LNG) terminals with the companies concerned as the national economy was under pressure because of them.

Information Minister Fawad Chaudhry said that the government had already decided to hold an audit of the two LNG deals as the previous Pakistan Muslim League-Nawaz (PML-N) government had played havoc with the national economy by signing such accords.

Petroleum Minister Ghulam Sarwar said that the PML-N government inked two LNG agreements. In one agreement, the return of equity was 44 per cent in dollars, which was much higher as compared to international standard, while in the second, the return of equity was about 22 per cent.

“The return of equity in both the agreements is very high as internationally, it is about 18 to 20 per cent,” he added.

The petroleum minister said that the agreements had a renegotiation clause and the government would use it. “If the negotiation is not successful, the government will utilise other remedies also,” he added.

Ghulam Sarwar said that according to the second agreement, the government had to pay about $245,000 per day to the LNG terminal owner. “Even if the second LNG terminal runs below its capacity, the government has to pay $245,000 per day.”

The minister viewed that both the agreements had brought the country’s economy under pressure. The Economic Coordination Committee (ECC) had held three meetings on the issue and a comprehensive briefing was given to the cabinet on Thursday.

The National Accountability Bureau (NAB), he said, was also looking into the LNG cases while the Supreme Court was also examining the same and his ministry had submitted its reply in the court.  He recalled that re-negotiation of terms and conditions was held with independent power producers (IPPs) in the past, which had decreased their rates after successful discussions.


Apprising about other decisions taken by the cabinet, the information minister said that the government had decided to withdraw its appeal in the Supreme Court regarding automatic weapons licenses. It believed that after the 18th Constitutional Amendment, it had become a provincial issue and they should make their policies keeping in mind their traditions, he added.

Fawad said that the law ministry had been advised to withdraw the case from the SC and Minister of State for Interior Shehryar Afridi would hold meetings with representatives of the provinces to chalk out a new strategy.

The minister informed that the cabinet decided to merge the Earthquake Rehabilitation and Reconstruction Authority (ERRA) into the National Disaster Management Authority (NDMA), as it had almost completed its task of reconstruction after the 2005 earthquake.

He, however, made it clear that all its employees would be accommodated in the provincial departments and NDMA, and no one would be terminated from service.

On the other decisions of the cabinet, Fawad said that it had been decided keeping in view the interests of the farmers, sugarcane crushing would start from November 15 instead of November 30 as demanded by mill owners.

He said it was unfortunate that the farmers were exploited by sugar mill owners and middlemen and were not being paid proper and timely prices of their produce. The chief ministers of Punjab and KP would meet the prime minister and discuss the issue of timely payment of dues to the farmers, he added.

To a question, he said discussions were going on with both the International Monetary Fund (IMF) and friendly counties for the provision of $12 billion. He rejected the impression that investors were scared by accountability process as transparency in affairs attracted more investment.

To another question about the Wall Street Journal story about Abraaj Capital’s founder alleged offer of $20 million payment to a Pakistani businessman to sell its stake in Pakistan-based K-Electric Ltd through the assistance of then prime minister Nawaz Sharif and his brother Shehbaz Sharif, the minister responded that said such news were now a routine matter.

To a query about the recent by-elections, Ghulam Sarwar said they were held in a free, fair and transparent manner as no government machinery was used.  “Both the general election and by-polls were free, fair and transparent.”

He alleged that in the past, the PML-N rulers had used government machinery to win the by-elections.