ISLAMABAD: The government is expected to pay Rs1.15 per unit water use charges to Azad Jammu & Kashmir – on par with net hydel profit (NHP) to provinces – on hydropower generation and reduce its federal grants and transfers proportionately.

The Economic Coordination Committee (ECC) of the Cabinet, which meets on Wednesday, would formally take up the matter referred to it by the federal cabinet a few days back.

Syed Mehr Ali Shah, Acting Secretary Water Resources, told a parliamentary panel on Tuesday that the AJK prime minister has been demanding same treatment for its hydropower generation on the pattern of net hydel profit being paid to Khyber Pakhtunkhwa and Punjab.

“The summary for water use charges for AJK on par with KP and Punjab is on the agenda” of ECC meeting to be held on Wednesday, he said. Shah informed that Article 161 of the constitution provided for payment of NHP to provinces on hydropower generation for their resources. The problem, however, was that AJK was not a province and not covered under article 161.

He said the previous government had constituted a three-member committee comprising federal secretaries of finance, water and power (later replaced with secretary water resources as the ministry stood bifurcated) and the chief secretary of AJK – all the three federal representatives.

The committee concluded that AJK, even though not covered under the said article, deserved to be treated fairly like any federating unit, he informed. The committee submitted its report to the federal cabinet recently which referred the matter to ECC to consider its implementation.

On questions from some parliamentarians, Shah said so far there was no such demand from Gilgit-Baltistan. The AJK was expected to get about Rs12-15 billion annual payments on this account that would go up as more projects come online.

Khwaja Muhammad Asif of PML-N said the article 161 did not bar any government from giving fair treatment to any other entity though it called for giving NHP to provinces. He said both AJK and GB should be given NHP on the pattern of provinces and their fair demands could be accommodated.

PPP’s Nawab Yousaf Talpur, who presided over the meeting, said the standing committee had already supported a report of the special committee that recommended payment of Rs1.15 per unit charges to AJK and the matter be concluded to the satisfaction of the people and the government of AJK.

Shah said the special committee had precisely recommended that AJK be given Rs1.15 per unit on electricity even if it was named something else like water use charge if there was some legal issue with NHP.

Wapda Chairman Syed Muzammil Hussain also supported the recommendation saying without going into the nomenclature, the AJK should be given Rs1.15per unit.

An official said the Ministry of Finance perhaps also had another consideration that would come up for discussion during the ECC meeting. He said the federal government paid some subsidies to AJK and GB that were not available to provinces and hence the ECC would consider if the equivalent subsidies to AJK should be given or not or reduced proportionately.

It was reported that AJK used to be paid 15 paisa per unit charges on power generation from Mangla Dam under a 2003 tripartite agreement, which was increased to slightly over 42 paisas per unit in 2013. Following the commencement of Neelum-Jhelum project, the AJK government demanded that it should be treated at par with provinces in the matter who were being paid significantly higher NHP now, standing at Rs1.15per unit with annual adjustment of 5pc.

To ensure that all parties were compensated fairly, a tripartite agreement was drafted and approved by the previous government for the payment of NHP and water usage charges to AJK that also constituted a committee comprising secretaries of finance, water and chief secretary of AJK to work out modalities.

The committee recommended that under a 1970 agreement with the federal government, AJK has to be treated fairly and at par with provinces for all practical purposes given its peculiar status and hence it supported the payment of Rs1.15 per unit charge to AJK even if there was no such provision in the constitution.

The report was taken up at the cabinet level recently where the prime minister advised that the matter be cleared by the ECC. The committee was told that Ministry of Finance had opined that under Article 161 (2) of the Constitution, NHP was admissible only to the provinces.

The NA panel committee was of the view that since most of the hydropower potential was available in AJK and Gilgit-Baltistan, they should not be antagonised and should be treated like the people of other provinces, if not better.

Published in Dawn, March 20th, 2019