PESHAWAR, Sept 7: The NWFP cabinet on Thursday approved the provincial hydel policy, 2006, allowing the private sector to instal hydro-electric power generation units of up to 50 megawatts free of any provincial tax.

Information Minister Asif Iqbal Daudzai said after the meeting that hydro-electric power generation had been exempted from provincial taxes to attract domestic and foreign investors.

Under the new policy, he said, investors could sell electricity to domestic as well as commercial sectors. Under the policy of 2001 only the industrial sector could purchase power from the private sector in the province.

The minister said that under the previous policy the private sector was allowed to set up units of up to 20MW. The new policy had been evolved in the light of the federal hydel policy, 2002, he said.

Mr Daudzai said the new policy had been based on build, operate and transfer scheme and its duration had been extended from 30 to 50 years.

He said investors were free to sell a generation unit after its installation with prior approval of the Sarhad Hydel Development Organisation (Shydo).

Under the policy, investors will pay Rs1,000 per kv to the provincial government per annum and Shydo will provide one-window operation facilities to them.

The minister said that about 70 per cent of the country’s hydro-electric resources existed in the province.

He said the NWFP could generate up to 25,000MW if the available resources were tapped.

Shydo Managing Director Ashtiaq Hussain Shah said work on three power houses would get under way next year and several other sites had been identified.

The information minister said the cabinet in its meeting presided over by Chief Minister Akram Durrani also approved an amendment to Section 14 of the Local Government Ordinance, 2001, proposing transfer of the subject of higher education from districts to the province.

The cabinet also approved public sector universities acts in the light of a verdict of the Federal Shariat Court.

The minister said the federal government had released only Rs50 million out of Rs600 million allocated for the flood affected people. The provincial cabinet expressed regret over the federal government’s attitude in this regard, he said. The cabinet, he said, urged the centre to release the remaining amount to rehabilitate the flood-hit people in various districts of the province.