PESHAWAR: Chief Minister of Khyber Pakhtunkhwa, Ali Amin Gandapur, has formally taken up the issue of the province’s outstanding of Net Hydel Profit (NHP) with Prime Minister Shehbaz Sharif.
In a letter addressed to the Prime Minister, the Chief Minister highlighted the constitutional provisions regarding the NHP, referring to Article 161(2) of the Constitution, which mandates that revenues generated from hydropower plants should be allocated to the entitled provinces.
The letter underscores that the Council of Common Interests (CCI) is responsible for determining the rate of NHP. In 1991, the CCI approved the Qazi Committee Methodology (KCM), which led to the first payment of Rs. 6 billion to the then-North-West Frontier Province (now Khyber Pakhtunkhwa) in 1992.
This methodology was subsequently endorsed by the National Finance Commission (NFC) and the Supreme Court of Pakistan in 1997. In 2016, the federal government introduced an interim arrangement, later ratified by the CCI, which set the net hydropower profit rate at Rs. 1.10 per kilowatt-hour, with an annual 5% indexation.
Under this framework, payments were made to Punjab and Khyber Pakhtunkhwa, but inconsistencies in these payments have led to accumulated dues of Rs. 75 billion for Khyber Pakhtunkhwa.
The letter further states that in 2018, the provincial government pressed for full implementation of the KCM formula, prompting the formation of a committee under the Deputy Chairman of the Planning Commission.
In December 2019, the committee verified that Khyber Pakhtunkhwa was owed Rs. 128 billion in net hydropower profits for the financial year 2016-17, a finding later endorsed by the CCI. To address the broader issue of provincial hydropower payments, another committee (Out of the Box Committee) was subsequently formed, which sought input from all stakeholders.
The Khyber Pakhtunkhwa government has already submitted its recommendations to the Planning Commission in response. Emphasizing the province’s financial crunch, the Chief Minister urged the Prime Minister to convene a meeting of the out-of-the-box committee at the earliest to ensure a fair resolution in line with constitutional provisions and CCI decisions.
He expressed confidence that Prime Minister Nawaz Sharif would play a leadership role in securing the constitutional and legal rights of the people of Khyber Pakhtunkhwa.
Copyright Business Recorder, 2025
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