ANL 11.10 Increased By ▲ 0.57 (5.41%)
ASC 10.07 Increased By ▲ 0.46 (4.79%)
ASL 10.95 Increased By ▲ 0.41 (3.89%)
AVN 73.31 Increased By ▲ 4.31 (6.25%)
BOP 5.99 Increased By ▲ 0.08 (1.35%)
CNERGY 5.23 Decreased By ▼ -0.04 (-0.76%)
FFL 6.85 Increased By ▲ 0.30 (4.58%)
FNEL 6.20 Increased By ▲ 0.17 (2.82%)
GGGL 12.33 Increased By ▲ 0.93 (8.16%)
GGL 16.41 Increased By ▲ 1.21 (7.96%)
GTECH 9.81 Increased By ▲ 0.64 (6.98%)
HUMNL 6.62 Increased By ▲ 0.23 (3.6%)
KEL 2.59 Increased By ▲ 0.04 (1.57%)
KOSM 3.06 Increased By ▲ 0.17 (5.88%)
MLCF 28.85 Increased By ▲ 0.92 (3.29%)
PACE 3.23 Increased By ▲ 0.19 (6.25%)
PIBTL 6.10 Increased By ▲ 0.08 (1.33%)
PRL 15.23 Increased By ▲ 0.08 (0.53%)
PTC 7.19 Increased By ▲ 0.32 (4.66%)
SILK 1.10 Increased By ▲ 0.07 (6.8%)
SNGP 26.20 Increased By ▲ 0.07 (0.27%)
TELE 11.06 Increased By ▲ 0.88 (8.64%)
TPL 9.40 Increased By ▲ 0.52 (5.86%)
TPLP 16.30 Increased By ▲ 0.66 (4.22%)
TREET 30.16 Increased By ▲ 0.16 (0.53%)
TRG 76.77 Increased By ▲ 1.52 (2.02%)
UNITY 23.21 Increased By ▲ 1.51 (6.96%)
WAVES 13.25 Increased By ▲ 0.65 (5.16%)
WTL 1.54 Increased By ▲ 0.06 (4.05%)
YOUW 5.05 Increased By ▲ 0.24 (4.99%)
BR100 4,277 Increased By 51.3 (1.21%)
BR30 14,956 Increased By 482.5 (3.33%)
KSE100 43,027 Increased By 300.8 (0.7%)
KSE30 16,360 Increased By 114 (0.7%)

ISLAMABAD: The government is to consider handing over hydropower projects to respective provinces and fix their tariffs by considering them as IPPs; well-informed sources told Business Recorder.

This proposal has been tailored by a technical committee constituted in the backdrop of dispute on Net Hydel Profit (NHP) calculations done by AGN Kazi Committee for calculation of Net Hydel Profit (NHP).

Wapda has to pay about Rs 500 billion per annum to KPK and Punjab, fearing that the entire power sector will collapse if this formula is implemented.

“If we accept the decision on AGN Kazi formula, the entire sector will become bankrupt as circular debt will cross Rs 3 trillion. KPK government has already been conveyed that it will be paid Rs 36 billion per annum at the rate of Rs 3 billion per month through Wapda,” said official documents of Power Division.

Controversy on NHP calculation was witnessed last year, when it came into the knowledge of Power Division that the minutes of Council of Common Interests (CCI) were tampered with at the highest level to “facilitate” one province.

Official documents available with Business Recorder reveal that in its meeting held on April 24, 2018, the CCI, in principle, reiterated its earlier decision on implementation of ANG Kazi Methodology and constituted a committee to deliberate upon the issue of determination of rates/net profits and submit report/ recommendation in the next meeting of the CCI for decision.

The composition of the committee includes Deputy Chairman Planning Commission, Secretary Water Resources Division, Secretary IPC Division and Chief Secretaries of KP and Punjab.

In its 39th meeting on September 24, 2018, the CCI decided that the Committee constituted by CCI in its meeting on September 24, 2018 may include Secretary Power Division and Advisor to CM KP on Energy as Member. The Committee will hold its meeting soon after the appointment of Deputy Chairman Planning Commission and shall give its recommendation in one month’s time to be placed before the CCI.

The report of Deputy Chairman, Planning Commission was presented in 41th CCI meeting held on December 23, 2019, which states that there is clear divergence in the viewpoints of various members of the Committee which could not be bridged. Reports containing views of Power Division, Water Resources Division, Government of Punjab and Government of KP as well as Deputy Chairman Planning Commission’s findings were prepared for consideration.

On February 18, 2020, Irfan Ali wrote a letter to the then Secretary Inter Provincial Coordination (IPC), Mohammad Ali Shahzada, saying that he wants to bring to his notice a most serious issue that has grave repercussions.

The Ministry of IPC issued a letter on January 6, 2020 on the 415th meeting of CCI with regard to NHP. According to former Secretary Power, Irfan Ali, in this letter it was clearly stated that the decisions being communicated were duly approved by the Prime Minister/Chairman CCI. The decision against agenda Item No. 1 was as follows:

“1(a) Implementation of Kazi Committee Methodology (KCM) for calculation of Net Hydel Profit (NHP) - After due deliberations on the issue of Net Hydel Profit and Kazi Committee Methodology, the CCI decided that the previous decisions of

the CCI on this subject would remain intact. In the light of previous CCI decision on the subject, the CCl further decided to constitute a committee of technical and financial experts to determine an out of the box solution/methodology to determine NHP Secretary IPC shall seek nominations from the Federal and Provincial Governments respectively and submit the same to the Chairman CCI/PM for approval. The committee shall furnish its report before the next CCI meeting.”

Mr. Irfan Ali, in his letter also wrote that the Power Division has now received another letter from the IPC Division of February 11, 2020 with the same reference number on the subject of “final decisions of 41st meeting of the CCI.”

“In this letter the decision against agenda Item No. 1 has been changed and reads as follows: After due deliberations on the issue of NHP and KCM, the CCI decided that the previous decisions of the CCI on this subject would remain intact.

In light of previous CCI decision the CCI further decided to constitute a committee of technical and financial experts to propose an out-of-box solution for the payment of NHP to entitled provinces. Secretary IPC shall seek nominations from the Federal and Provincial Governments respectively and submit the same to the Chairman CCI/PM for approval. The subject committee shall furnish its report before the next CCI meeting.”

“It is quite clear that through the letter of February 11, 2020, the meaning and the intent of the decision of the CCI has been completely changed,” said, Irfan Ali in his letter.

According to him, the decision reflected in the letter of January 6, 2020 had been conveyed conclusively and the text reflected the actual decision taken in the CCI. With the changed text on February 11, 2020 the spirit of the CCI decision has been tampered with, he said, requesting Secretary IPC to immediately look into this matter and to conduct an inquiry to fix responsibility.

Power Division also requested IPC Division to withdraw the letter of February 11, 2020 as this actually violates the Prime Minister’s decision during the CCI meeting.

The then Secretary Power had also expressed his apprehensions that any nomination against a wrongly changed decision shall not serve the purpose, requesting him to rectify it.

The CCI, in its 43rd meeting held on November 11, 2020 took note of the implementation status and emphasized that Committee should submit its report/ recommendations to CCI once it was finalized.

The Ministry of Planning, Development and Special Initiatives has furnished following update on recorded minutes of the 2nd meeting of the Committee of Experts which are as follows: (i) historical NHP payments and their modes need to be documented. CPPA-G, Wapda and provinces to work out correct figures paid as NHP and submit to the Committee in its next meeting;(ii) Secretariat (MoPD&SI) will collaborate with CPPA-G to present tariff projections, anticipated subsidies and reform plan in the power sector during the next month;(iii) Governments of KP and Punjab to come up with suggestions for evaluating transfer of HPPs (Hydel Power Plants) like Tarbela in KP and Ghazi Barotha in Punjab to respective provinces; and (iv) Secretariat will collaborate with CPPA-G, Wapda and other stakeholders to develop and present a tariff model for the existing HPPs considering them as IPPs with Return on Equity (RoE).

The CCI will consider the report of technical committee in its meeting scheduled for Thursday (Jan 13).

Copyright Business Recorder, 2022

Comments

Comments are closed.