Prime Minister Yousuf Raza Gilani has reportedly supported the Punjab government in getting the much delayed Net Hydel Profit (NHP) after the Chief Minister wrote a very strongly worded letter to him, official sources told Business Recorder.
The history of NHP dispute between the federal and Punjab governments is more than a decade old when the Economic Co-ordination Committee (ECC) of the Cabinet had recorded 'inaccurate' minutes. This issue, however, had been taken up by the previous government of Chaudhry Pervez Elahi but it remained unresolved.
The sources said the ECC had considered a summary on "net profits due to Punjab on account of bulk generation of power at Ghazi Barotha and other hydroelectric stations operated by Wapda in the Punjab" in April, 2008 submitted by the Ministry of Water and Power and desired that after providing more details the matter might be put up for consideration before the cabinet.
Article 161 (2) of the Constitution guarantees that net profits earned on hydel power generation by the federal government or any agency administered or established by the federal government will be paid to the province in which the hydroelectric power generation project is situated.
The background of the issue is that while considering a summary submitted by the Ministry of Water and Power on April 10, 1996 on "Ghazi Barotha Hydropower Project comparison of cost of energy in public versus private sector" the ECC had approved the release of bridge financing of 100 million dollars for the project with the agreement of the Punjab government that it would forego the net profits from the generation of hydel electricity from the project.
The sources said the Punjab government had asserted that it had made a conditional offer in the said meeting of the ECC to forego its right of net profit from Ghazi Barotha Hydropower Project "provided to the effect that offer of Punjab would only hold good if other provinces also follow the suit in national interest."
According to the Ministry of Water and Power, the Punjab government contends that while recording the said ECC decision this stipulation was inadvertently omitted. The Ministry was of the view that the Punjab government felt that non-payment of net profit earned from the bulk generation of power from hydroelectric stations located in the Punjab was not only a violation of the Constitution but also a discrimination.
The Punjab Chief Minister in a letter to the Prime Minister on June 6, 2009 reiterated Punjab's claim in his attempt to maximise resources to meet the development priorities aimed at benefiting more than half the population of country. "Depriving Punjab of its due share of NHP is impinging adversely upon the available fiscal resources and impeding the pace of economic growth and development in the Province," the sources quoted Chief Minister Punjab as saying in the letter.
According to sources, the Water and Power Ministry was of the view that the right of a province established under the constitutional provisions could not be overruled by the ECC. "The cabinet may therefore, consider the proposal of Punjab so that the province is paid net profit in respect of hydroelectric stations located in Punjab as per constitutional provisions. The cabinet, in its last meeting, discussed the issue in detail and approved the proposal of the Water and Power Ministry.