KP receives not a single penny of Rs65 bn NHP in six months

PESHAWAR: Despite the fact that Pakistan Tehreek-e-Insaf is in power in both the Centre and Khyber Pakhtunkhwa, the province has not received a single penny of Rs65 billion net hydel profit (NHP) and arrears on account of the NHP in the first two quarters of the current financial year 2018-19.

Wapda is seeking a loan to pay the Khyber Pakhtunkhwa its NHP arrears. It was supposed to make the payment of the NHP as per the revised rates, which have now accordingly been projected at Rs28.781 billion for the current fiscal.

The provincial government received two tranches of Rs25 billion during the previous financial year and against the Rs70 billion arrears, Wapda has yet to pay a sum of Rs10 billion and Rs15 billion for the year 2017-18 and 2018-19, respectively.

The province had estimated it would receive Rs65 billion as NHP, including Rs38 billion arrears, which comes to 10 percent of its receipts.

Finance Minister Taimoor Saleem Jhagra in his budget speech had said the province would receive Rs29 billion under the head of NHP and power arrears. He added that the provincial government would strive to get Rs36 billion as decided under the AGN Kazi methodology.

However, at the end of the first two quarters of the current fiscal, the province could not receive any instalment of the NHP or arrears.

The documents of the Finance Department available with The News show that the provincial government was expecting to receive Rs20.8 billion as NHP during the first two quarters (July-December) of the previous fiscal year of 2017-18, but it could not receive the amount.

However, it received Rs17.5 billion on account of NHP arrears against Rs15 billion it estimated for the period. This comes to 117 percent of the receipt of the NHP arrears of the previous fiscal year.

In its budget estimates, the provincial government has projected it would receive Rs40 billion as NHP during the July-December quarters. It expected to receive another Rs25.3 billion as NHP arrears during the period.

This proved to be wishful thinking on the part of the provincial government as it could not receive a single penny of the Rs65 billion NHP and arrears of the NHP during the last two quarters.

Finance Secretary Shakeel Qadir Khan, when contacted, acknowledged that the NHP receipt haul had proven as a huge “hole” for the province when it comes to the receipts from the federal government.

“We have budgeted NHP at Rs65 billion for the current fiscal year, but so far we haven’t received a single penny,” he said. “December has passed and we are still looking at a hole of Rs36 billion that was expected during the first two quarters. The entire haul is around Rs35 billion. We expected to receive at least Rs26 billion by the end of the first two quarters,” he argued.

When asked as to what was the main glitch impeding the inflow of the NHP, he said the problem was a bit procedural and it was at the level of the federal government. “However, after some reluctance, they (federal authorities) have finally incorporated it (NHP) into the main tariff and from the 1st January, they have started collection of the main NHP. They have so far collected the arrears of around Rs70 billion, but we have not received any share of it as the central power purchasing agency has spent it in some other head,” Shakeel Qadir explained.

“The collection of the main NHP chunk has been started from January and Chief Minister Mahmood Khan, Finance Minister Taimoor Saleem Khan and a few key federal functionaries including federal finance minister met Prime Minister Imran Khan last week on the issue. They have agreed that Wapda would raise a loan against the anticipated revenue collection of the NHP. Wapda will pay us (KP) in one go and will pay the loan through the money collected from power sale. It is a done deal now and we hope the province will get some amount of the NHP during the current month,” the finance secretary disclosed. He said the Finance Department will be able to allocate some additional resources for development once it received the money under NHP in January.