Centre to pay Rs82 billion NHP to Punjab

Wapda to issue promissory note of Rs38 billion by Dec 2016

ISLAMABAD: The federal government has agreed to pay the Punjab province Rs82 billion Net Hydel Profit (NHP) from year 2005 to 2016 of which the Water and Power Development Authority (WAPDA) will issue Rs38 billion promissory note by end December 2016, while the remaining amount will be paid in next three years.     

In a meeting chaired by Senator Mohammad Ishaq Dar, Minister for Finance, Revenue, Economic Affairs, Statistics and Privatization, the federal government has agreed to settle the Net Hydel Profit relating to Ghazi Brotha Hydel Power Project following the principles of similar settlement reached earlier this year with the Khyber Pakhtunkhwa government. 

Federal Minister for Water and Power Khawaja Asif, Chief Minister Punjab Shahbaz Sharif, Punjab finance minister, federal secretary Water and Power and other officials of the federal and provincial government attended the meeting.

The Wapda, through the Ministry of Water and Power, after soliciting Council of Common Interests (CCI) approval, would file a petition with the National Electric Power Regulatory Authority (Nepra) seeking tariff determination for supply of electricity from Ghazi Barotha Hydel Power Plant incorporating the terms of the settlement.

It is worth mentioning that the Punjab government is also seeking an increase in NHP to Rs9 billion per annum for the hydropower projects installed in the jurisdiction of the province.   In Punjab, eight hydropower projects with the combined generation capacity of around 1,794 MW electricity are operational. 

Ghazi Barotha is the main hydro-power project in Punjab. Barotha is run of the river project completed in 2004-05. It is generating 1,450MW electricity. Other seven projects, for which Punjab is demanding NHP, include Chashma hydro-power project 184MW, Jinnah hydro-power project 96MW, Rasool Hydropower Station 22MW, Chichoo Ki Malian 13.2MW, Nandipur 13.8MW, Shadiwal 13.5MW, and Renala Khurd 1.1MW.

It is pertinent to mention here that the KP was getting a royalty of around Rs6 billion per year during 1991-16 for electricity being generated in the province.  Earlier this year the Centre and Khyber Pakhtunkhwa reached an agreement on settlement of net hydropower profit.

Following the agreement between the centre and province, the Nepra had approved an increase of around 217 per cent in NHP for the KP.  The KP government share was increased and entitled to around Rs18.704 billion annually against the previous Rs6bn.

The province’s share of NHP was increased to Rs1.10/kWh for FY 2016 and the decision was later endorsed by the Council of Common Interests (CCI). The federal government is paying Rs18.704 billion as the NHP to the KP for the hydel power stations situated in the province generating 17,004 GWh electricity.

It was also agreed that the federal government will pay Rs70 billion net hydropower profit to the province in four years.  The first installment of Rs25 billion would be paid to the province during the current financial year and remaining amount in equal installments of Rs15bn each in three years.