Centre settles NHP row with KP, to pay Rs 70b in four years

• Centre and province to jointly undertake construction of Chashma Right Bank Canal

The Centre has agreed to pay Rs 70 billion due to the Khyber Pakhtunkhwa government on account of net hydel profit within four years besides increasing the annual net hydel profit from Rs 6 billion to Rs 18 billion.

The breakthrough was made after a high-level huddle between senior government leaders from the province and the federal government. A Memorandum of Understanding (MoU) was also signed between Federal Finance Minister Ishaq Dar and KP Chief Minister Pervez Khattak to put the agreement in black and white.

The KP government had demanded payment of Rs 144 billion on account of outstanding net hydel profit but the federal government was able to persuade the provincial government to agree on Rs 70 billion with an incentive that its annual profit share would also be increased to Rs 18 billion.

Water and Power Ministry and KP governments also agreed to hold negotiations to finalize an accord on hydro power issues by 31st of next month. The Federation would also pay arrears worth Rs 956 million to the province.

Both sides also agreed to undertake the construction of Chashma Right Bank Canal. The federal government will provide Rs 65 billion while the KP government will spend Rs 35 billion on this project. On completion, the project would irrigate 300,000 acres of land.

The KP government has also been allocated 100 mmcf gas per day for electricity generation projects owned by the provincial government or based on public-private partnership.

Talking to reporters after the signing of the MOU, Finance Minister Dar said several rounds of talks had taken place with the KP provincial government after which the two sides were able to resolve the matters amicably.

KP Chief Minister Khattak thanked Dar and Federal Water and Power Minister Khawaja Asif for resolving the longstanding issue.

Addressing reporters, Khawaja Asif said the resolution of the decades-long issues augurs well for smooth and harmonious relationship between the federation and province.

He noted that these issues could not be resolved despite the fact that there were either governments of the same parties or coalition partners at the Centre and in KP during the last 15 years.

He said resolution of these issues when two different political parties are in power at the Centre and the province shows that politicians are capable of resolving problems provided there is will to do so.