QUETTA, Jan 22: The federal government has waived an overdraft of over Rs17.5 billion pending against Balochistan to help the province overcome its economic problems, Chief Minister Aslam Raisani told a press conference here on Thursday.

He said the overdraft would be frozen for six months and the centre would pay the amount to the State Bank out of its own resources.

The provincial government had been paying Rs250 million per month to the central bank on account of repayment of overdraft and mark-up.

“Balochistan will no more be liable to pay any mark-up,” he said, adding the amount would now be spent on development.

The chief minister said that for the first time in history there would be no SBP loan outstanding against Balochistan.

“Now we can hope there will be no deficit in the next provincial budget,” Mr Raisani told a questioner, adding that the federal government had assured of increasing financial assistance for the province.

Mr Raisani said that when the coalition government took over, the overdraft was Rs22 billion but it was reduced by curtailing non-development and other expenditures.

He said the central bank had converted the overdraft into a soft loan two months ago.

The chief minister said all coalition partners in the provincial government had pleaded with the federal government to resolve the financial crisis.

He said that his government took up the issue with President Asif Ali Zardari and Prime Minister Yousuf Raza Gilani, resulting in waiver.

Mr Raisani said that his government would continue to work for the development of the province and would not compromise on its rights. “The people opposing development in Balochistan are not friends of Baloch and Pashtoon people.”

In reply to a question about the Gwadar Port, he said his government had reservations about ‘outsiders’.The provincial government would provide all help and security to the people coming to Gwadar, the chief minister held out an assurance.

“They can do business, set up industries and purchase property, but will not have voting right because they will not be issued identify cards.”

Mr Raisani said that he had already expressed dismay over the agreements reached with the Singapore Port Authority for handling the Gwadar Port and other companies in Balochistan. He made it clear that any agreement undermining the rights of Baloch people would be resisted.

He said that parliamentary groups in the coalition government would submit recommendations to the federal government for extracting maximum powers for Balochistan.

Talking to Dawn, Provincial Finance Secretary Mahfooz Ali Khan said the write-off would bring about a saving of Rs5 billion every year.“We have paid Rs600 million to the SBP in the past two months after conversion of overdraft into soft loan,” Mr Khan said.

Sajid Gondal adds from Islamabad: In the next National Finance Commission award, Balochistan will get additional revenues from the divisible pool to fight poverty, the province’s finance minister, Asem Kurd, told a press conference after a meeting with President Asif Ali Zardari.

He said Punjab had agreed to consider the poverty factor in determining the award.

The award would be commissioned before the federal budget, Mr Kurd said.

He said that the NFC award would be based on multiple criteria and poverty would be considered a basic tool for measuring financial requirements of a federating unit.

He informed newsmen the federal government had also agreed to raise Balochistan’s share in the Public Sector Development Programme from the next financial year.

Mr Kurd said that despite facing a financial crunch, the federal government had not reduced the share of Balochistan in the PSDP during the current fiscal year.

During the first six months of the current financial year, the Balochistan government had received Rs 27 billion as its share from the federal divisible pool and there was no shortfall in provincial receipts from the federal government, Mr Kurd said.

He had also discussed with President Zardari the issue of Balochistan’s royalty from Uch gas field.

The royalty works out to 12.5 per cent, whereas currently the province was being paid less than its share.

The president had directed the prime minister to pay full share of royalty from Uch gas field to Balochistan. Moreover, the provincial government would be paid Rs3 billion in arrears of Uch gas field royalty since 2001, he added.

The provincial finance secretary was present at the press conference.