The issue of payment of Khyber Pakhtunkhwa's arrears in the form of hydel profit from hydroelectricity. Chief Minister Khyber Pakhtunkhwa Ali Amin Gandapur has sent a letter to Prime Minister Shehbaz Sharif. Article (2) 161 of the Constitution of Pakistan has clarified the issue of net profit of hydropower. 

According to the said article of the Constitution, the amount of profit earned from hydropower plants is to be received by the respective provinces. The rate of this amount received by the provinces is to be determined by the Council of Common Interests. The Council of Common Interests had approved the Qazi Committee Methodology (KCM) for this purpose in 1991. Under the KCM formula, the first payment of six billion rupees was made to the then North-West Frontier Province (Khyber Pakhtunkhwa) in 1992. In the year 1997, the National Finance Commission and the Supreme Court of Pakistan also ratified its KCM formula. 

In the year 2016, the federal government also introduced an interim procedure related to this matter. The Council of Common Interests has also ratified this interim procedure. According to this interim procedure, the rate of net profit of hydropower has been fixed at Rs 1.10 per kilowatt hour. The interim procedure An annual increase of five percent has also been fixed on the rate. Under the same procedure, WAPDA started making payments to Punjab and Khyber Pakhtunkhwa. However, due to non-payment of dues under the said procedure, Khyber Pakhtunkhwa accumulated Rs 75 billion. 

In 2018, the Khyber Pakhtunkhwa government took up the issue with the federal government for full implementation of the KCM formula, as a result of which the Council of Common Interests formed a company headed by the Deputy Chairman Planning Commission to determine the net profit rate of hydropower. This committee submitted its report in December 2019, which was endorsed by the Council of Common Interests. In this report, Khyber Pakhtunkhwa’s arrears of Rs 128 billion have been confirmed as per the KCM formula for the financial year 2016-17. 

Later, another committee was formed to suggest an out-of-the-box solution to the issue of payments of net profit of hydropower to the provinces. The Out-of-the-Box Committee resolved the same issue. Suggestions have been sought from all stakeholders for progress towards this goal. The Khyber Pakhtunkhwa government has sent its suggestions in this regard to the Planning Commission. 

In view of the financial crisis facing the Khyber Pakhtunkhwa government, there is a need for an immediate solution to this issue. Therefore, orders should be issued to the Planning Commission to convene a meeting of the Out-of-the-Box Committee as soon as possible, so that a fair solution to this long-standing issue can be found in accordance with the requirements of the constitution and the decisions of the Council of Common Interests. I hope you will play a leading role in providing the people of Khyber Pakhtunkhwa with their constitutional and legal rights.