By Tariq Naqash
MUZAFFARABAD, June 17: The Azad Jammu and Kashmir (AJK) government believes if the benefits accruing to it from the generation of hydropower from Mangla in shape of net hydel profit share and general sales tax are transferred by the central government, not only its fiscal woes but also its dependence on Islamabad for grants would reduce to a great extent.
The government here has long been pleading with Islamabad that it should be paid net hydel profit share of Mangla on the pattern of Khyber Pakhtunkhwa as well as the Punjab but to no avail. The recent cuts in the region’s development budget by the central government had however intensified the need to forcefully claim what the government and people in AJK unanimously deemed was their due right, according to officials.
“Share in net hydel profit and payment of GST from the day it was levied are AJK's right and as we face acute shortage of funds for developmental activities the need to claim the same has increased manifolds,” said nformation minister Sardar Farooq Ahmed Tahir on Thursday, a day before the government here will present its next year's deficit budget.
He maintained although the central government would pick AJK’s budget deficit every year, “the demand for net hydel profit share and GST was aimed at reducing, if not equalising, the shortfall in income and expenditures from our own resources.”
“We also want to do away with a misconception that our region does not generate any income on its own,” he added.
The Mangla powerhouse, located in the territory of AJK, was commissioned in 1967 and completed in four stages. The initial phase, comprising of four units of 100 MW each, was completed in 1967-69. The first extension of Units 5-6 (2 x 100 MW) was completed in 1974 and the second extension comprising of Units 7-8 (2 x 100 MW) was completed in 1981. The project attained its maximum capacity of 1000 MW with the final extension of Units 9-10 (2 x 100 MW) in 1993-94. The power station utilises the outflow of Mangla dam, also located in the AJK territory.
According to AJK officials, at the time of construction and commissioning of Mangla power station, electricity was cheap and it had no remarkable value in the commodity market but with the passage of time the same had become the most costly item and a major source of income for the areas where it was being produced.
With the commissioning of Tarbela hydropower station in the late 70’s, the KP government initiated a case for a share in net hydel profit generated from there. The demand underwent long arbitrations, leading to the famous Agha Ghulam Nabi (A.G.N) Qazi formula which, with complex calculations, decided net hydel profit share at 70 paisa per unit with maximum limit of Rs 6 billion per annum.
With some modifications, the Punjab had also succeeded in getting hydel profit share from Ghazi Barotha hydropower project.
At the time of Mangla dam raising project in 2003, the AJK government had showed concern for net hydel profit share, maintaining that though AJK was not a province but under a cabinet division notification of May 1997, “for all practical purposes it ought to be treated like any other province”
However, under the Mangla raising agreement between the AJK government, Wapda and the government of Pakistan, the net hydel profit share was substituted by water use charges at the rate of 15 paisa per unit –55 paisa less than what had been worked out by AGN Qazi formula.
According to careful calculations by the AJK government, the tentative net hydel profit share since the commissioning of the project (1967-68) stands approximately at Rs 125.33 billion and the same, if calculated from 1995, stands approximately at Rs 48.5 billion.
Even from 2003-04, when the AJK government started receiving water use charges at the rate of 15 paisa per unit, the arrears assessed from the difference of payment stand at Rs 16.763 billion.
As far as the arrears accrued from levy of GST are concerned, they stand at Rs 10.54 billion from January 1, 2000 to April 30, 2010.
Ends
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