PESHAWAR: The Khyber Pakhtunkhwa government is anticipating its annual share of net hydel profit to surge from over Rs20 billion to Rs200 billion by 2023 after the implementation of the AGN Kazi committee formula.

KP adviser to the chief minister on energy and power Himayatullah Khan told Dawn that the Council of Common Interest (CCI) had considered in April and September this year the implementation of Kazi committee formula for the calculation of profits on hydroelectricity production and formed a committee to work out the NHP figures under that formula.

The committee consisting of federal minister for planning, secretaries of power and water resources, chief secretaries of KP and Punjab, and KP adviser on energy and power is scheduled to meet later this week.

The Kazi committee was formed in July 1985 to frame a formula for the calculation of the NHP to the provinces under the article 161(2) of the constitution and was headed by Planning Commission deputy chairman AGN Kazi.

CM adviser says province’s NHP share likely to go up from Rs20bn to Rs200bn by 2023

Article 161 (2) of the Constitution states, “the net profits earned by the federal government or any undertaking established or administrated by the federal government from the bulk generation of power at hydro-electric station shall be paid to the province in which the hydro-electric station is located.”

The committee finalised its report two years later, in July 1987 to be exact, which was approved by the CCI in Jan 1991 and since then, KP and centre have been trying to reach a settlement on the issue.

In 2005, an arbitration tribunal determined the payment of Rs110 billion arrears to KP as NHP arrears, while in 2016, KP and the centre agreed on an interim arrangement allowing payment of Rs70 billion in arrears and uncapping the NHP share from Rs6 billion to Rs18 billion with five percent annual increase. The uncapped amount has since jumped to over Rs20 billion.

The adviser said the KP government had submitted its case to the committee, which projected the province’s share of NHP for 2016-17 at Rs128 billion.

He said in case of agreement on that figure, the province’s share would increase as more hydroelectric units began producing electricity and that the profits were likely to surge to Rs200 billion by 2023.

“The NHP issue is a matter of life and death for the province,” he said, adding that currently, the province’s own revenue was projected at mere over Rs40 billion in a budget of over Rs550 billion.

The adviser said it was going to be huge source of funds for the province.

Mr Himayatullah said the CCI on at least on eight occasions since the award was announced in 1991 had reiterated the implementation of the Kazi committee formula for the disbursement of NHP. He said the energy department had planned to brief the national and provincial lawmakers from KP on the issue to forge a consensus of all political parties.

The adviser, however, denied the impression that the surge in NHP profit would cause price hike for electricity consumers.

He said the price hike issue was a misconception and was being spread by those wanting to deny the province its due share in electricity profits.

The adviser said increase in KP’s NHP share won’t bring about higher electricity prices.

Published in Dawn, December 12th, 2018