Islamabad - The federal government has failed to achieve consensus on the interpretation of Article 154 of the constitution for the supply of gas to two 2453 MW RLNG-based power plants in Punjab, a pre-condition set by the Economic Committee of the National Economic Council (ECNEC) for approval, and now the Sindh government is creating hurdles in the way of release of funds for the projects, it was learnt here on Sunday.

“Both the governments have failed to agree on the definition of Article 154 of the constitution, and now the government is facing problems in authorising the release of funds for the projects,” an official source told The Nation.

The source further said that now it had been decided to move another summary to seek the approval of ECNEC for the delinking of agreement with Sindh, definition of Article 154 of the constitution, and the release of funds.

ECNEC, in February last year, had approved, in principle, two RLNG-based power plants for Punjab, namely 1230 MW (gross) combined cycle power plant at Haveli Bahadur Shah, Jhang, costing Rs98,104.56 million and 1223 MW (gross) Combined Cycle Power Plant at Balloki, Kasur, costing Rs92,336.02 million.

ECNEC had also constituted a committee, consisting of federal ministers for water and power; petroleum, attorney general, provincial finance ministers and federal law secretary, to interpret Article 154 within one week.

“However, despite the lapse of one year, the issue is still lingering, which is creating hurdles in the way of release of funds for the projects,” the official said.

As per the reservation of Sindh government, RLNG is a natural gas and the constitution does not put it into either indigenous or imported category.

In pursuance of Article 154, approval by the CCI is mandatory for the formulation and regulation of policies for the transportation, utilisation, marketing, allocation and distribution of LNG.

Supply of natural gas from Sindh, under swapped arrangements, cannot be construed as LNG supply to the power projects.

The swapping arrangement has seriously compromised energy security of Sindh as import of RLNG is highly uncertain and unreliable.

In the absence of dedicated transmission line for LNG, currently the natural gas from Zamzama field, Dadu, Kandanwari and Sawan fields Khairpur is being supplied to upcountry through swapped arrangement, through existing lines, without the approval of CCI or the Government of Sindh.

Interestingly, the Ministry of Planning is going ahead with releasing funds, and total spending till June 2016 stood at Rs26,075 for Baloki and Rs33,999 million for Haveli Bahadur Shah.

Similarly, out of the total allocation of Rs60 billion for the current fiscal year, 2016-17, so far the ministry has released around Rs25 billion for both the projects.

The total allocation, in the PSDP 2016-17, for both the projects of Baloki and Haveli Bahadur Shah was Rs60 billion.

However Rs12933 million for Baloki and 12630.000 million for Haveli Bahadur Shah have already been released.

“For authorising the release of funds, the issue of interpretation of Article 154 is a pre-requisite in the light of ECNEC’s directive,” the official said.

“However, it is not known who authorised the release of funds for the projects without meeting the ECNEC’s condition,” he added.

When contacted, an official of the Ministry of Planning told this scribe on the condition of anonymity that the release of funds by the ministry did not mean payment to the contractor. “There are two requirements for the release of funds: one is an administrative order, which is issued by the ministry, while the authorisation which is given by the concerned ministry,” he added.

The contractor will only get money after the authorisation of the release of money, which is connected with the resolution of the issue,” the official said, adding that the Ministry of Planning had not settled the matter of authorisation yet.