The announcement by Prime Minister Yousuf Raza Gilani that the federal government would pay in five instalments Rs 110 billion Wapda owes to NWFP in net hydropower profit arrears is indeed a laudable initiative towards addressing the province's long-standing grievance in this regard.
The prime minister has revealed at a press briefing at Governor House in Peshawar that the federal government, after consultations with the provincial government high-ups, has agreed to pay the principal amount of Rs 110 billion outstanding against Wapda under the head of net profit on hydropower generation. According to the payment methodology to be adopted, the federal government would immediately release an amount of Rs 10 billion while the remaining amount would be paid in four instalments in the first quarter of each fiscal year, Gilani has further told the press briefing.
The annual payment to be made to NWFP roughly works out at Rs 25 billion, unless interest on each instalment is also factored in. Gilani has also announced withdrawal of a case filed on behalf of Wapda, saying that a "technical committee" would work out the recommendations for payment of any future liabilities, including interest, to the province under the same head. It will be recalled that an arbitration tribunal, in a 2005 ruling in favour of NWFP, had ordered Wapda to pay Rs 110 billion to the province in five instalments. However, the federal government, which was the guarantor for Wapda, instead of complying with the tribunal's decision, challenged it in a civil court. Subsequently, the NWFP government approached the Supreme Court.
Gilani said that according to the decision reached after holding consultations with the stakeholders, both the parties would withdraw their court cases. Meanwhile, the federal government's decision to pay up the arrears is apparently in compliance with the tribunal's order - though late by about four years.
The PPP-led government's decision to pick up the massive backlog of Rs 110 billion, essentially run up by Wapda's past high-ups, is a noble gesture, not only towards the national power utility; but also towards the insurgency-wracked province, which is also in the cross-hairs of the global war on terror. However, surprisingly, the federal government has yet to declare NWFP a war-hit zone, and announce relief measures under special emergency revenue concessions. For instance, such concessions would involve the waiving of loans of businessmen belonging to the insurgency-hit regions of the province. Over the years NWFP's economy has suffered badly, hampering the province's industrial growth due to fallout of the Afghan war, sectarian tensions, militancy and more recently, due to military operations in parts of the province and the adjacent tribal belt for hunting down the extremists. Secondly, the economic problems of the province have worsened due to gas and electricity loadshedding as well as large-scale displacement of people from the insurgency-hit parts of the province.
Pakistan is believed to have suffered an aggregate loss of $36 billion since 2001, while being the frontline province NWFP has had to sustain the crippling brunt of the multifaceted fallout. (One estimate has put the NWFP's total loss at over Rs 500 billion). Thirdly, there has been an ominous reduction in the number of functioning industrial units as a result of shrinking economic activities in the province. (For instance, the province had 3,600 functioning industrial units in 2005, out of which there remain 2254 units, though only 594 of them are functioning, according to available data.) Interestingly, although the province helps produce thousands of megawatts of hydropower, the power tariff is said to be the highest in the province. If correct, this anomaly must be removed at the earliest, which can help reduce the economic burden of the common man there. The least the government can do is to strictly adhere to the schedule of payment announced by Prime Minister Gilani.
The demand of the provinces for transfer of profits and royalties from natural resources within their respective jurisdictions, under the Constitution is perfectly within the ambit of law, which the federal government must honour. Almost all our national troubles have historically arisen from the propensity of non-political, and at times even political forces, either to hold the Constitution in abeyance, or to mutilate it to such an extent as to make it lose its basic spirit. If there are differences over calculation of the provincial share, these should be resolved in keeping with the norms of accounting as well as in the light of decisions of Council of Common Interest (CCI) and in the light of Constitutional provisions. It is now for the federal government to ensure that the Prime Minister's decision is implemented in letter and spirit without any adverse bureaucratic or other type of intervention to thwart implementation of the decision.