KP threatens to boycott CCI over ‘trespass’

ISLAMABAD: The Khyber Pakhtunkhwa government has threatened to boycott constitutional forums such as the Council of Common Interests (CCI) over the alleged trespass on provincial rights and powers by federal authorities.

In a strongly-worded letter to Prime Minister Shahid Khaqan Abbasi, Chief Minister Pervez Khattak has protested a set of recent decisions, taken by the federal government on financial, oil and gas and electricity matters without taking the provinces into confidence, with far-reaching consequences.

“I am also perturbed to express my concern over the mode and manner the energy issues are dealt at federal level these days,” Mr Khattak wrote, reminding the prime minister that Pakistan is a federation based on the principles of cooperative federalism, where provinces cannot be simply ignored in important matters and a number of constitutional institutions existed to safeguard the provinces’ interest.

If this was not enough, the KP chief minister went on to demand provincial representation in all important forums, “especially relating to energy”, such as the Private Power & Infras­tructure Board (PPIB), Central Power Purchase Agency-Guarantee (CPPA-G), National Trans­mission & Dis­patch Company (NTDC), Alter­native Energy Develop­ment Board (AEDB), gas companies and related regulatory bodies.

CM Khattak deplores centre’s ‘unilateral’ decision-making; seeks provincial representation on all energy-related forums

The chief minister particularly opposed the centre’s recent decision to discontinue upfront tariff-based power projects in the renewable sector against the deterioration of the provincial investment climate.

He said the CCI was one of the constitutional forums where “all subjects contained in Part II of the Fourth Schedule are to be discussed, dilated upon and decided. Electricity as well as oil and gas are such subjects, but instead of involving provinces in important policy matters concerning energy, matters are being directly taken to Economic Coordination Committee and the Cabinet Committee on Energy, which is a glaring violation of Article 154 [of the Constitution]”.

Mr Khattak maintained that other provinces had also raised concerns, and asked for the matter to be placed on agenda of the next CCI meeting. “In the meantime, I urge you to direct all concerned to abide by the mandate of the Constitution in letter and spirit in terms of Article 5 of the Constitution,” he wrote.

He said that the recent federal government announcement on power purchase agreements, which was made without taking the provincial governments into confidence, had not only shaken their confidence, but also frustrated a large number of investors in hydel power projects.

Challenging the basis of the policy shift, Mr Khattak wrote: “The premise whereupon this policy is based is faulty in essence and anchored on phony presumptions and suppositions of achieving the target excess generation vis-a-vis demand”.

“The decision will surely damage the trust between the citizens of Khyber Pakhtunkhwa and [the] federal government,” he warned, adding that the move would also overburden citizens by ignoring the most economical power generation method, i.e. hydroelectric, and giving preference to coal and LNG-based power projects.

As a seasoned politician with a rich understanding of issues relating to energy and power, Prime Minister Abbasi must be aware of the sensitivities attached to the matter of net hydel profit and the way it had been historically dealt by the AGN Kazi Committee and other constitutional forums, Mr Khattak wrote.

Recalling that the formula for payment to the provinces had been endorsed by the CCI, the KP CM said that in its meeting on Aug 25, 2017, the council had discussed a summary seeking the adoption of the AGN Kazi methodology for measuring net hydel power profit.

The matter was referred back to Ministry of Inter-Provincial Coordination for review, and in its meeting on Sept 19, 2017, the IPC deliberated the issue and recommended the requests from KP and Punjab to the CCI for finalization of the award.

Despite a crystal-clear legal position, net hydel profits were being dealt with in an ad hoc manner, making it a sore subject for hydel power-generating provinces and KP in particular.

He said the province had brought the matter to attention of the CCI many times and asked the centre to “act magnanimously” while respecting the sentiments of a smaller federation unit to prevent further mistrust.