ISLAMABAD: The federal government and Azad Jammu and Kashmir (AJ&K) government are said to have failed to finalise electricity tariff and rates of Water Usage Charges (WUC) as wide differences were witnessed on this issue between federal government entities and AJ&K government, well informed sources told Business Recorder.
At a recent meeting of Steering Committee presided over by Advisor to Prime Minister on Inter Provincial Coordination Rana Sanaullah Khan, Secretary, Kashmir Affair & Gilgit-Baltistan Division Waseem Ajmal Chaudhary recalled the background of the meeting and shared that Ministry of Kashmir Affairs & Gilgit-Baltistan had conducted three meetings of stakeholders on the outstanding issues of Water Use Charges.
He added that since consensus could not be achieved on some of the provisions of the draft bilateral agreement, the Ministry as per request of Government of AJ&K, proposed constitution of a High level Committee and finally Prime Minister’s Office directed to place the matter before the Steering Committee on Prime Minister’s Program on Development-AJ&K.
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Secretary Kashmir Affairs & Gilgit-Baltistan stated that in case of AJ&K, Water Use Charges (WUC) are paid in lieu of Net-Hydel Profits paid to the Provinces. He added that in case of Neelum Jhelum Hydro Power Project, Government of AJ&K claims payment of Water Use Charges retrospectively; i.e., from the date of Commissioning of Project (2018 onwards)
Secretary Ministry of Water Resources (MoWR) Syed Ali Murtaza responded that retrospective payment is not allowed under ECC decision and only Federal Cabinet can approve retrospective payments. The Chair queried as to why payments on account of Water Use Charges were not being made despite the fact that water was continuously being used for energy generation since 2018?
Chief Executive Officer Central Power Purchase Agency –Guaranteed (CPPA-G) Rihan Akhtar replied that payment of Water Use Charges is clubbed with tariff determination by National Electric Power Regulatory Authority (Nepra). He clarified that electricity generated from Neelum Jhelum Hydropower project is not part of the tariff mechanism of Nepra. Secretary MoWR clarified that since Nepra’s jurisdiction does not extend to AJ&K, the government of AJ&K does not accept the tariff determined by it.
CEO CPPA-G informed the meeting that Neelum Jhelum Hydropower project sells electricity at Rs. 9.11 per unit to CPPA-G which is approved by Nepra. After incorporation into the National Grid the electricity is sold back to government of AJ&K through Bulk Tariff (minus NJ production) at Rs. 3.81 and further distributed by Distribution Companies (IESCO, PESCO, and GEPCO).
Chief Secretary AJ&K Dawood Muhammad Bareach apprised the Chair that the issues of Neelum Jhelum Hydropower Project (like mitigation measures, GST and tariff; etc.) were also deliberated in the Inter-Ministerial Committee during caretaker setup from (November 2023 to February 2024). He proposed that Prime Minister AJ&K and Minister for Energy AJ&K be formally invited or made part of the Committee.
He urged the forum to give an in-principle approval to the retrospective payment of Water Use Charges from 2018 onwards. The Chair remarked that Prime Minister AJ&K and Minister for Energy AJ&K are Integral part of the Committee and shall be formally invited in the next meeting.
The Chair also agreed to the retrospective payment of Water Use Charges for AJ&K from date of commission of project in-principle.
Secretary KA&GB Division noted that issue of jurisdiction of Nepra can be resolved by extension/adoption to AJ&K through legislative process provided in the AJ&K Constitution Act 1974 as amended from time to time.
He shared that prior to 13th Amendment the subject “electricity” was within the legislative jurisdiction of AJ&K Council vide Third Schedule “Council Legislative List” at Entry no. 35.
However, after 13th Amendment to AJ&K Constitution Act 1974, the subject is reflected in Part-B (Entry 8) of the legislative list of AJ&K Legislative Assembly which requires consent of government of Pakistan. Member Legislative Assembly (MLA) Shah Ghulam Qadir endorsed the view that post-13 Amendment, the subject Electricity was within legislative competence of AJ&K Legislative Assembly.
Secretary Water Resources also proposed for constitution of a Pakistan-AJ&K Joint Energy Commission with appropriate membership of both governments to resolve the issue of tariff.
Chief Secretary AJ&K added that in violation of Mangla Dam Raising Project (MDRP) Agreement, Nepra had been unilaterally increasing the Electricity Tariff for AJ&K. He further added that the draft bi-lateral Agreement was approved by AJ&K Cabinet which inter-alia contained a provision for 150 MW Electricity to Muzaffarabad and Poonch Divisions, mitigation measures, transmission lines, tariff, etc.
Any changes in the draft need to be consulted with the AJ&K Government (Prime Minister and AJ&K Cabinet). Secretary KA&GB noted that it was important to determine as to whether AJ&K Government shall accept any such proposed Pak-AJ&K Joint Energy Commission.
Chairman Nepra Waseem Mukhtar while responding to a query of Chair regarding reason of non-payment of WUC since 2018 remarked that there was no legal cover under which WUC could be made.
Copyright Business Recorder, 2024