PESHAWAR: The federal and Khyber Pakhtunkhwa governments have agreed to issue Rs250 billion Sukuk bonds to clear the province’s net hydel profit dues.

The agreement came during a meeting between federal power minister Omar Ayub Khan and KP finance minister Taimur Saleem Jhagra in Islamabad on Friday.

PTI senior leader Jehangir Khan Tareen was also present in the meeting.

KP finance minister Taimur Saleem Jhagra told Dawn that the province had been in constant contact with the centre on the hydel profit issue since last year.

He said irregular hydel profit payments were causing problems for the province as on one time, it received a big tranche of the proceeds but for many months, the centre didn’t pay anything.

Centre, province agree on Rs3bn monthly payment

The minister said the provincial government took up the issue with the federal government and insisted on some kind of ‘predictability’ in the release of the hydel profit proceeds to the province.

He said a breakthrough came on the matter in July this year when the two sides agreed that the province would receive Rs3 billion a month as net hydel profit and dues.

“In August, KP received Rs3 billion in lieu of NHP,” he said. Mr Jhagra said the province received Rs2.5 billion in Sept, Rs2 billion in Oct and Rs3 billion in Nov.

He said the province had received Rs10.5 billion net hydel profit in the Aug-Nov period.

The finance minister said the provincial government also took up the issue of payments through the Sukuk bonds with the federal government but there was no agreement on it until Friday when the federal power ministry agreed on payments.

Mr Jhagra said after the development, the province was likely to receive Rs10 billion of its net hydel profit share by Jan or Feb next year.

He said the province was likely to receive over Rs30 billion during the current year.

The minister said the issue of the hydel profit payment in line with the AGN Kazi committee methodology was pending with a committee headed by the deputy chairman of the Planning Commission and that it was likely to take some more time for a decision. A statement issued here said the issuance of Sukuk bonds would help resolve the longstanding issue of net hydel profit payments to KP.

Mr Jhagra said the issue had been one of the most challenging problems for the province for many years.

He said the province had always taken up the hydel profit issue at all available forums but no previous federal government paid serious attention to the matter.

The minister praised the PTI-led federal government for positive response to the NHP issue and appreciated the role of federal power minister Omar Ayub Khan on it.

“Mr Ayub has done a stellar job of reforming the power sector,” he said.

Mr Jhagra invited the federal minister to Peshawar for reforms in the sector with the support and cooperation of the provincial government.

Published in Dawn, December 8th, 2019