ISLAMABAD - The Water and Power Development Authority has cleared the outstanding Net Hydel Profit (NHP) dues around Rs150 billion of Punjab and Khyber Pakhtunkhwa provinces.

Out of the total Rs150 billion, Rs41.6 billion were raised by Wapda through loans from local banks, said the Ministry of Water Resource while briefing the Council of Common Interest.

According to the minutes of the meeting, the Ministry of Water Resources informed that in compliance with the CCI's decision, Wapda raised a loan of Rs41.6 billion from local banks in January 2018 against the guarantee of Government of Pakistan.

Accordingly, the NHP liabilities of Wapda were cleared. Earlier, the CCI decided that the Wapda should pay the outstanding dues of NHP to KP and Punjab by generating loan backed by the government guarantee in accordance with the MoU signed for the purpose.

The CCI also decided that the words "and onwards" appearing at the end of para-45 of the minutes of CCI meeting dated December 16, 2016 be replaced with the words "and the same rate may be continued as an interim rate for subsequent years till the finalisation of revised rates. AGN Kazi formula will be taken by the CCI after the briefing to the PM by a committee having representation of Water Resources, Power, Finance and IPC divisions."

The meeting was informed that for the period starting from October 2017 onwards, Wapda filed its tariff petition to National Electric Power Regulatory Authority (Nepra) on March 30, 2017, which gives its final determination of tariff on December 14, 2017.

The tariff has been approved by the federal cabinet in its meeting held on February 13, 2018.

The Ministry of Water Resources further informed that the Nepra had determined NHP arrears as per the CCI decisions and in its determination dated November 22, 2017 has provisionally allowed NHP regular payment @Rs1.155/kWh for the KP and Punjab provinces as against the previous rate of Rs1.100/kWH and advised Wapda to take up with the CCI for resolving the matter permanently.

In the light of the Nepra's decision, the matter would be taken up with the CCI for the finalisation of revised rates after notification of tariff determined for FY 2017-18.

Total NHP cleared by the Wapda till October 31, 2017 was Rs149.945 billion which includes Rs43.07 billion NHP arrears to the Government of Punjab, Rs12.6 billion NHP annual regular payment to the Government of Punjab, Rs45 billion NHP arrears to the Government of KP and Rs49.3 billion NHP annual regular payment to the KP.

However, Rs41.6 billion was paid from the money raised through loans, which includes Rs43.07 billion NHP arrears as Punjab received Rs4.95 billion and Rs12.6 billion against NHP regular.

Similarly, KP received Rs4.7 billion against NHP arrears and Rs19.3 billion against NHP regular.

Last year November, the Nepra allowed an increase of Rs3.40 per unit in bulk hydropower tariff for Wapda to generate additional revenue of Rs119 billion.

The major hike was necessitated by a decision of the CCI to pay more than Rs86billion arrears to Khyber Pakhtunkhwa Rs24.3 billion and Punjab Rs62 billion on account of NHP.

Wapda had sought Rs88.3 billion worth of arrears payable to the two provinces for 2017-18 but the regulator worked it down to Rs86.2 billion.

Likewise, Wapda had demanded Rs33.027 billion annual regular payments to the two provinces but Nepra worked it down to Rs32.9billion.