NHP ARE policy, other projects: PM likely to preside stormy meeting of CCI today

ISLAMABAD: Prime Minister Imran Khan is to preside over a stormy meeting of Council of Common Interests (CCI) Thursday (August 6) as a war of words is expected between the federal government and provinces on various issues, including Net Hydel Profit (NHP) ARE policy and other energy related projects.

The provinces will be represented by their respective Chief Executives and other concerned Ministers and officials in person or video link, who will plead their case at the highest forum, which is constitutionally mandated to discuss disputes between the federating units. Sindh is also expected to raise Pakistan Steel Mills (PSM) issue in the meeting.

A couple of days ago, Prime Minister chaired pre-CCI meeting, wherein different Ministries/Divisions shared their views on the issues submitted to the CCI.

The CCI will consider the following agenda: (i) amendment in the Oil and Gas Regulatory Authority Ordinance, 2002( Ordinance XVII of 2002) ( Government of Sindh); (ii) handing over control of lower portion of Chashma Right Bank Canal (CRBC) and supply of full share of water from CRBC to Punjab( Government of Punjab); (iii) future role and functioning of National Commission for Human Development (NCHD) and Basic Education Community School (BECS) to promote literacy in the country; (iv) strategy to combat Covid-19; (v) windfall levy on crude oil, condensate and natural gas under Petroleum Policy, 2012 (Government of Sindh); (vi) amendment in the regulation of mines and oil fields and mineral development ( Government Control) Act, 1948: (vii) annual reports of the CCI for the years 2017-18; (viii) implementation status of decisions of CCI held on December 23, 2019), (a) recommendations of the Attorney General for Pakistan concerning the Water Accord, 1991; (b) matters pertaining to high education in post-18th amendment scenario and (c) funding in devolved vertical programs of health and population welfare; (ix) unauthorized deductions by the federal government on FBR's claim on account of alleged outstanding withholding tax on vehicles and 3 per cent service charges deducted on account of collection of withholding tax by the Government of Balochistan; (x) unauthorized transfer of public money from Provincial Consolidated Fund (PCF) to Federal Consolidated Fund by the SBP on the directions of FBR; (xi) unconstitutional and unauthorized deductions by FBR from the Provincial Consolidated Fund; (xii) No Objection Certificate-CJ Hydro (Private) Limited, -Sindh government has raised objection on the project and urging on IRSA to withdraw NOC given to Punjab Government; (xiii) approval of Alternative & Renewable Energy Policy 2019; (xiv) import of LNG( Petroleum Division); (xv) royalty on LPG by the E&P companies at the market value of LPG; (xvi) implementation of article 158 and 172(3) of the Constitution of Pakistan; (xvii) recovery through tariff of markup on bilateral Islamic/commercial loans obtained by Wapda for payment of NHP to the Government of Khyber Pakhtunkhwa and Punjab; (xviii) draft recruit regulations for the post of Chairman and Members Wapda and implementation of Kazi Committee Methodology (KCM) for calculation of NHP.

Well-informed sources told Business Recorder, in case the proposal of Kazi committee is approved by the CCI, Wapda has to pay Rs 180 billion per year to KP from existing Rs 20 billion. Former Secretary, Power, Irfan Ali has already accused top bureaucrat of PM office of manipulation in minutes of previous CCI minutes. Punjab which is getting Rs 15 billion per annum as NHP will receive Rs 79 billion per annum.

"If the Kazi Committee-based recommendations are approved as it is, hydroelectric power tariff will be increased to Rs 13 per unit from existing Rs 5.32 per unit," said an official on condition of anonymity.

Power Division maintains that the country's power sector economy was unable to bear this unrealistic burden.

According to sources, ARE Policy promises a higher proportion of the national energy supply mix from ARE resources by targeting 20 per cent share of installed capacity by 2025 and 30 per cent by 2030. The most significant feature of the policy is that it makes a transition from the traditional methods of procurement based on cost plus and upfront tariffs to competitive bidding in line with the global trends. It has an expanded scope encompassing all major alternative and renewable energy sources and also address areas like distributed generation systems, off-grid solutions, B2B methodologies etc.

The sources said, a controversy still exists between Sindh government and federal government on dispute settlement mechanism on ARE projects. Sindh argues that in case of a dispute with any renewable energy company, which invests in Sindh, no federal government entity, like NTDC or Discos will approach any tribunal or court of law. Federal government is not ready to accept this condition, arguing that if this condition exists in Nepra Act, how can the federal government exclude it from the policy. Many disputes have already been resolved between the parties.

Copyright Business Recorder, 2020