LAHORE, Sept 23: As the Wapda-NWFP government standoff over calculation of net hydel profit continues, hapless consumers wonder if it would mean yet another hike in power tariff.

The Wapda authorities have been paying as much as Rs6 billion to the NWFP government annually for the last 10 years, and passing the burden on to the consumers. The NWFP government is demanding that the amount should be increased and reportedly finding sympathetic ears at the highest level. Any such increase will inevitably be passed on to the consumers in the shape of a higher power tariff.

“The government must not ignore this factor before unilaterally increasing the amount,” requests a consumer from Lahore. It would be tantamount to relief for those who do not pay their bills — like those in tribal areas — at the cost of those who pay their bills regularly, he claimed.

In fact, the payment methodology worked out by the Qazi Committee satisfied nobody. The government forced the Wapda authorities to pay a lump sum of Rs6 billion to the NWFP. This order on one hand punished Wapda and the consumers with overpayment and on the other left the NWFP unsatisfied. This necessitates a fresh look at the whole issue and a revised payment formula rather than an executive order.

The net hydel profit goes to provinces, according to Article 161(2) of the Constitution. Following implementation of the Constitution in 1973, the National Finance Commission (NFC) appointed a committee headed by A. G. N. Qazi, who was then the deputy chairman of Planning Commission, to devise a methodology for paying the profit to provinces.

Wapda accepted the formula worked out by the committee with some reservations. The NWFP government, too, raised some objections. The matter was referred to the Auditor General of Pakistan, who accommodated Wapda’s reservations with minor adjustments. The Council of Common Interest approved and the law ministry endorsed the methodology for working out the net hydel profit.

However, Wapda did not pay the amount worked out, as there was no provision for tariff covering this sort of payment. The Hydel Surcharge was, therefore, introduced by the federal government on January 1, 1992, to enable Wapda to make the payment. The profit calculated from 1973-74 to 1990-91 was adjusted against the deficit grants of the federal government.

According to the Qazi Committee methodology, Wapda should have paid Rs57.425 billion to the NWFP during the last 10 years, but had actually paid Rs65.662 billion — Rs8.237 billion more. Sources in Wapda said that the authority was paying under direct orders from the federal government. Otherwise, there was no justification for such high payments.

Even while quoting water usage charges of Ps15 per kilowatt agreed with hydel IPPs — Rajdhani and Lareb — instead of the Qazi Committee methodology, the sources termed payment to the NWFP exorbitant. According to them, even if the payment is calculated on the basis of 0.233 cents per kilowatt laid out by the Hydel Energy Policy, conversion comes to around Ps14 per kilowatt. However, the NWFP was paid at a rate of Ps43 per kilowatt in 2000-01 and Ps41 in 2001-02.

“The matter needs to be resolved without imposing additional burden on consumers,” a former member of Wapda demanded. If payment to the NWFP is increased due to political reasons, wait for Wapda asking the National Electric Power Regulatory Authority (Nepra) for a corresponding increase in tariff. The payments to the NWFP have not been made out of any profit, but as a tax imposed by the federation on a federal body. Any increase in it would, of course, be met with demand for additional money either from the government or the consumers. The government must make some calculations before taking any decision. However, the unsatisfactory Qazi Committee methodology must be revised without burdening the consumers, he maintained.