KP earns Rs13.55b from T-bills, other investments

PESHAWAR: Khyber Pakhtunkhwa has earned Rs13.55 billion from investment in the treasury bills (T-bills) and other products that increased the volume of Hydel Development Fund (HDF) to Rs27 billion.
An amount of Rs14 billion is being spent on hydropower generation projects in the province.
This information was provided during a briefing to the spokesperson of the provincial government Mushtaq Ghani, who is also minister of information, at the Civil Secretariat by the officials of the Finance Department and Energy and Power Department on Tuesday.
The briefing was in response to the criticism made by Pakistan Muslim League-Nawaz (PML-N)’s lawmaker Daniyal Aziz and others that Khyber Pakhtunkhwa government had illegally invested the HDF in the stock market instead of spending the money on hydropower generation projects.
The briefing was mainly conducted by Manager HDF, Najmuzaman and Zain Shah, chief planning officer, Finance Department. Secretary Information Abid Majeed, Director Information Shoaibuddin and a select group of journalists were also present on the occasion.
The officials termed it a misconstrued notion of the PML-N leaders that the KP government invested the HDF in the money market.
They said the government had not invested any fund in the stock market. Rather, they said it offloaded some of its shares from the stock market that were actually bought by the previous provincial governments.
During the briefing, it was stated that the province had created General Provident Investment Fund (GPIF) and HDF in 1992, while the Employees Pension Investment Fund (PIF) was set up in 1998.
Later, proper legislation was carried out to provide legal cover to these funds and investment committees for GPIF and PIF led by the chief secretary. The committees were formed in 1999 and 1995, respectively. An independent board was formed for the management of HDF after the promulgation of Khyber Pakhtunkhwa Hydel Development Fund (HDF) Ordinance 2001 that is being headed by chief minister.
The officials said that after a sizable increase in the GPIF and PIF, the provincial government decided in May 2005 to invest some of these funds in the stock market.
They explained that initially Rs20 million was invested in blue chip shares in the stock market. Till August 2008 the investment reached Rs563 million and earned an amount of Rs121 million to-date.
The officials said the provincial government offloaded Rs388 million shares when these made a recovery after the recession of 2009.
However, they added that the province still retained Rs175 million shares in the stock market from GPIF and PIF funds.
About the HDF, the officials claimed that not even a single penny from the fund had been put at stake anywhere in any stock in the world.
They said the HDF had risen to Rs27 billion of which Rs14 billion were being spent on five hydel-power projects in the province. They said Rs9 billion had been invested in T-bills. They added that the province has earned Rs13.55 billion since 1992 from investments made out of these funds.
The officials said the GPIF presently totalled Rs40 billion, PIF Rs26 billion and HDF Rs27 billion.
They added that the provincial government has deposited Rs16.8 billion of these funds with the Bank of Khyber and Rs200 million at the National Bank of Pakistan (NBP). They maintained that KP had made no deposits in any private sector commercial bank in the country.