KP’s power sector: FD seeks PD’s comments on issues raised by caretaker CM

ISLAMABAD: The Finance Division has sought comments from the Power Division on power sector-related issues raised by caretaker Chief Minister Khyber Pakhtunkhwa, Azam Khan.

In a letter to Finance Minister Ishaq Dar, the Chief Minister has sought his attention to the critical financial health of the government of Khyber Pakhtunkhwa and shared the following contentious issues pertaining to its power sector pending decision with the federal government and highlighted during the visit of the Prime Minister to Peshawar on May 25, 2023: (i) clearance of outstanding amount of Rs 9.5 billion of PEDO; (ii) exemption from income tax on the analogy of Wapda; (iii) enhancement in rate of Water Usage Charges (WUC); (iv) insertion of exit clause in the PPA of 81 MW Malakand–III Hydropower Project; (v) compensation for un-utilized water share; (vi) financing of power component of Wapda from Public Sector Development Program (PSDP); (vii) withdrawal of review petition filed before Nepra on the establishment of KPT & GSC; and (viii) Chashma Right Bank Lift Canal.

According to the caretaker Chief Minister, the government of Khyber Pakhtunkhwa has chalked out comprehensive working papers on all the power sector issues and will soon share them with the concerned stakeholders.

He maintained that the issues need early resolution as non-resolution is greatly affecting the financial health of the government of Khyber Pakhtunkhwa, therefore they need to be resolved at the earliest, and he sought intervention of Finance Minister and a meeting with all the concerned stakeholders.

According sources, caretaker KP Chief Minister has also placed following ten demands before Prime Minister, which are now on the table of top bosses of concerned Ministries for action and early response: (i) levy Federal Excise Duty on oil @ 5 per cent of valorem in light of Article 161 (1) (a) of the Constitution of Pakistan; (ii) increase Federal Excise Duty on gas from 10 to Rs 25 per MMBTU and link the rate to Consumer Price Index (CPI); (iii) schedule an urgent meeting of CCI and decide the matter of windfall levy on oil related to Tal Block; (iv) transfer windfall levy on oil share collected from Baratai and Togh Blocks to the government of Khyber Pakhtunkhwa without further delay; (v) transfer 50 per cent of Government Holding Private Limited (GHCL) share in KP Block to KP Holding Company in the light of Article 172(3); (vi) allocate 20 per cent Liquefied Petroleum Gas (LPG) produced by KP by GHPL and Pakistan Petroleum Limited (PPL) to KP-OGDCL on G2G basis; (vii) establish Pakistan Petroleum Upstream Regulatory Authority with representation recommended by the Provincial Government; (viii) Facilitate GoKP in wheeling of electric power to industrial sector of KP on the Pehure Model; (ix) Reallocate 100-MMCFD gas from power to industrial sector.

Deputy Chairman Planning Commission may be directed to place the matter of Net Hydel Profit (NHP) in the next CCI meeting; (x) release the pending payment of NHP amounting to Rs 49.5 billion; and (xi) Flood Relief Assistance.

Copyright Business Recorder, 2023