Sindh and Balochistan agree to settle GDS issue: 45 plus share in NFC Award indicated

Federal Finance Minister Shaukat Aziz has said that Sindh and Balochistan have agreed on an agreement to settle the issue of gas development surcharge (GDS), but he did not disclose the formula evolved between the two provinces.
Briefing the newsmen in the Cabinet Room after chairing fifth meeting regarding sixth National Finance Commission (NFC) Award here on Saturday, the minister said opportunity has been given to NWFP and Punjab to file their comments on it before the next meeting scheduled in Quetta.
Shaukat Aziz told newsmen the federation and all four federating units are close to settle the issue of the distribution of federal divisible pool, and hints at 45 plus share for the provinces in the next NFC Award.
He said two-item agenda was discussed in the Saturday meeting, adding: "We are heading towards right direction with regard to distribution formula of the divisible pool", and have made a lot of progress in the fifth meeting today."
He informed newsmen that the meeting of NFC held in extremely cordial atmosphere, saying a feeling of consensus has been developed among the members over core issues.
He hinted at the announcement of an historical award by March 31 to enable the provinces to make their budgetary proposals according to the new Award.
Shaukat Aziz said two items were on the agenda of the NFC meeting ie evolving of mechanism for distribution of resources from federal divisible pool and the gas development surcharge (GDS).
He said a lot of progress was made on various issues in informal meetings among the finance ministers of all the four provinces held here on Friday.
He was confident that the core issue of the net hydel profit between NWFP and Wapda would be resolved before finalising the NFC Award, saying the issue would be resolved through arbitration council. The NWFP has already named its three arbitrators, while Wapda would have to nominate arbitrators shortly, he added.
Shaukat Aziz said the decision of the arbitration council will be binding on both the parties.
In response to a question, he said that poverty is not restricted to only NWFP.
He assured that the requirements of every federating unit would be accommodated in the next NFC Award, saying that resources never remain in proportion with the demands.
However, it depends on system and methodology adopted for fair and equitable distribution of resources.
Shaukat Aziz said the federation has already decided to increase the share of the provinces from the divisible pool, but it is the responsibility of the provinces to ensure its just and judicious distribution.
To another question, he said as per the constitution the NFC Award has to be unanimous, therefore, all the five parties have to agree to it, adding the NFC has a clear mandate of distribution of resources in equitable manner, therefore, the Poverty Reduction Strategy Programme is a different subject.
In reply to a question, Shaukat Aziz said the federation takes the exchange risks and repayment guarantee on loans extended to the provinces directly by the donor agencies.
This is a kind of measure to accelerate poverty reduction programmes and rate of development in the provinces, he added.
Speaking in the meeting, Senior NWFP Minister Sirajul Haq said the whole nation is looking towards the meetings of the federal and four provincial finance ministers over the next NFC Award, and expressed the hope that next NFC Award will be revolutionary and not conventional.
Sirajul Haq urged Shaukat Aziz to supervise the arbitration process with regard to settlement of net profit issue.
He, however, made it clear that the NWFP will not sign the NFC Award unless the issue of net profit was resolved in accordance with AGN Kazi formula.
Punjab Finance Minister Sardar Hasnain Bahadar, in his remarks, said the Punjab government would accept the arrangement to be made by the government for the settlement of gas development surcharge issue.
He said the members inched closer to their targets in Saturday's NFC meeting, and expressed the hope that the net hydel profit issue would be settled shortly.
Balochistan Finance Minister Syed Ihsan Shah said the matter of GDS has been settled in Saturday's meeting, and was confident that NFC will finalise its report by March 31.
Abdul Qayum Lodhi, member NFC from Sindh said that NWFP and Punjab are to be included in GDS lists as they have sufficient gas reserves, and hoped that there will be no difficulty in settling the GDS matter.