Seminar by National Think Tank: Equitable distribution of resources among provinces stressed

PESHAWAR: Speakers at a seminar here on Friday underscored the constitutional obligations surrounding Net Hydel Profit (NHP) and the pressing need for equitable distribution of resources among provinces, particularly Khyber Pakhtunkhwa (KP).

The National Think Tank - Good Governance Forum, in collaboration with the Institute of Management Sciences, Peshawar, had arranged the seminar which focused on NHP.The event was held at the Institute of Management Sciences, attracting academia, political parties members and technocrats.

Dr Syed Akhtar Ali Shah, Chairman of the National Think Tank, talked of the legal aspects of NHP, emphasizing its significance for the region’s economic landscape.Keynote speaker Fuad Ishaq, the Sarhad Chamber of Commerce and Industry president, presented an industry perspective on hydel prospects, highlighting the potential benefits for local businesses and the economy.

Himayatullah Khan, a technical expert on the NHP and former adviser on Energy and Power, analyzed the AGN Kazi formula, the impact of hydel power generation on the country, and the advantages of wheeling. He underscored the importance of optimizing hydel resources for sustainable energy production.

Iqbal Zafar Jhagra, former KP governor, talked about the importance of NHP and its implications for the province’s development. He called for strategic planning to harness Hydel resources effectively.

Dr Usman Ghani, Director of the Institute of Management Sciences, concluded the seminar by reaffirming the institute’s commitment to promoting discussions on relevant topics that contribute to societal progress.

They said the key constitutional articles relevant to NHP — Article 157 — allowed the federal government to construct hydroelectric power installations with prior consultation from provincial governments. Article 161(2) mandates that net profits from hydroelectric power generation be paid to the province where the station is located.It was reiterated that the Council of Common Interests (CCI) endorsed the Kazi Committee Methodology for calculating NHP in 1991.

An arbitration tribunal was constituted in 2005, which announced its award on October 9, 2006, granting KP an amount of Rs. 110 billion. However, WAPDA filed a petition in civil court against the tribunal’s decision in the same year. The amount was finally received in 2009 after negotiations involving the Chief Minister of KP and the Prime Minister.

Despite these provisions, the implementation of NHP has faced significant bottlenecks, leading to a sense of deprivation among provinces. A payment of Rs. 6 billion was made in 1992, coinciding with KP’s budget of Rs. 14 billion, where KP’s Annual Development Programme was of Rs. 4.8 billion for that year.It was stated that the KP had not received any NHP payments for the last five months, despite estimating a need of Rs 31.5 billion for the fiscal year 2022-23.

In 2016, a Memorandum of Understanding (MOU) was signed to increase NHP from Rs 6 billion to Rs 18 billion annually, yet recent payments have been erratic, severely impacting KP’s financial health and development efforts. In 2016, an interim arrangement was established at Rs. 1.10 per unit with a 5 pc indexation, increasing the annual NHP to Rs. 18.7 billion.

The speakers said the KP government maintained that the transfer of NHP was a constitutional obligation of the federal government and WAPDA.It was stated that payments were erratic and had hindered KP’s ability to meet its budgetary needs, prompting the provincial government to engage with the prime minister to resolve these issues.