Daily Times

ISLAMABAD: Nawaz Sharif led Federal Government has turned down 24 demands submitted Pakistan Tehreek e Insaf (PTI) led Khyber Pakhtunkhwa (KPK) Government, saying government could not violate the constitutional limits to pacify political opponents.

On the call of KPK Government, Chairman Senate Raza Rabbani had formed special committee with Senator Syed Muzaffar Shah of Pakistan Muslim League F, in the chair to examine the demands in light of the constitution provisions pertaining to provincial autonomy.

A year is going to pass since the formation of special committee which failed to resolve the issues although more than dozen meeting had been held.In the last meeting, Special Committee Chairman Syed Muzaffar Shah politely advised the both the governments to resolve the conflicting issues on mutual basis otherwise the final recommendations would be sent to the house.

The committee is set to hold final meeting on May 19 to give finalize the recommendations that would be submitted to the whole committee of senate house.Province Government called for inclusion in ECC, sovereign guarantee, new NFC Award, land for Railway Transit Centre, NHP payment and right to impose taxes on oil and gas produce indigenously and special concession to the industries located in the province.

Daily Times has obtained the documents pertaining to the demands of KPK Government and the plea of the federal government.Provincial Government led by Chief Minister Pervaiz Khattak called upon the federal government to provide more than Rs 165.675 billion to province in respect of Net hydel profit but the federal government was of the view that it could pay only Rs 133 billion which shows shortfall of Rs 32 billion. The federal government is also reluctant pay the outstanding arrears of Rs 6 billion which were owed to WAPDA.To settle this financial issue the Special Committee of the Senate held meeting but the contentious issue between the both governments has not been solved. KPK Government also demanded to uncapped amount of Net hydel profit which is only Rs 6 billion annually. Under the 7th NFC Award federal government agreed to pay a sum of Rs 110 billion towards principal liability in instalments.

The federal government has also rejected the demand saying the NHP would not be enhanced at any cost. It has trashed the demand regarding the NHP saying that paying of NHP arrears together with mark up would be accepted. But this move of federal government deprived the KPK government of Rs 45 billion.

The federal government has not refused to entertain the demand of KPK regarding the operationalization of constitutional provision under article 167 regarding provincial borrowing. Under 18th Amendment the provinces were assured to give more financial autonomy and they would be given authority to take debt from foreign banks with the approval of federal government. KPK government stated that it is keen to set up power houses in the province in order to overcome the load-shedding but the federal government has refused to award sovereign guarantee to the province.

The Special Senate Committee is likely to give instructions to the federal government to entertain the KPK demands under the constitutional provision. To strengthen its financial position, the provincial government has also called upon Nawaz Sharif led federal government to allow it to impose or collect federal excise duty on oil as per article 161. KPK contains abundant oil and gas reserves and thousands barrel oil and huge volume of gas has been produced from there.
In the light of natural reserves and its production, province could be prosper if the provincial government is allowed to collect FED on oil and gas but the federal government is not willing to entertain this demand.

KPK government also demanded of payment of windfall levy on oil and gas in terms of petroleum policy 2012, besides it also demanded the collection and payment of royalty on LPG. The province claimed that with the positive nod of the federal, province could stand of its own feet and the socio economic condition of the poor could be changed.
Provincial government has also demanded of the federal government to ensure the inclusion of KPK in trade and energy corridor that is being executed with the financial support of China.

The documents stated that federal government has decided to set up few energy projects in KPK that is only 6 per cent of total development strength and it is 9 per cent less to the fair share of province.
The province also called upon the central government to avoid placing UFG on gas consumers rather than this burden should be shifted to gas companies as well.

Federal government has also rejected the fair demand of the province regarding removal of moratorium on new gas connection and load extension for industrial of KPK and gas producing district Kark, Kohat and Hangu.

The provincial government has also demanded the provision of sovereign guarantee for hydro or other IPPs owned by the government for projects above 50 MW by PEDCO. In the light of war on terror which inflicted colossal loss to the province, the government demanded adequate allocation, release and utilization of public sector development programme in the province and also be made no lapsable. The document says that federal government released only 13 per cent funds to the company working in KPK that is pathetic position it.

The government has also demanded the waiver of KPK financed projects from approval of CDWP and ECNEC, because these committees have become stumbling block in the way of the completion of the development projects.
It has demanded of special development project to the province in the light of terror incident hit the province including Army Public School and Operation Zarb Azb.

Federal government should facilitate the KPK to impose or collect provincial taxes such as infrastructure development cess, cross adjustment of sales tax on services. KPK Government also demanded the inclusion of chief secretary in the ECC meeting and supplying working papers, summaries and minutes of the meeting to them. The government has said it has 13.5 per cent share in power production but the people of the area have to endure more than 8 hours load-shedding daily. It has also threatened to withdraw police from WAPDA security and will seal the stores to recover all material for local construction.
The government has also call for new NFC award as 7th NFC award is going to complete its tenure at the end of current financial year.

The KPK government has also asked the federal government to provide extra land for the construction of Railway Transit in Peshawar to overcome the traffic congestion and to facilitate the commuters. The federal governments have flatly refused to facilitate the demand.