Govt mulls delinking hydel profit from tariff

The Power Division has opposed any move to burden electricity consumers with Rs170 billion in net hydel profit (NHP) arrears owed to provinces and urged delinking these payments from the electricity tariff. Alongside the Sindh government, the Power Division has also rejected proposals to transfer hydropower assets — including dam-based and run-of-the-river plants — to provincial control. Both argue that such infrastructure, financed through the Public Sector Development Programme (PSDP) and local and foreign loans, belongs to the federation and the people of Pakistan. Officials said the Power Division fears further tariff increases would derail power sector reforms, particularly ongoing renegotiations with independent power producers (IPPs), and could undermine investor confidence. The division also emphasised legal and constitutional issues, as the matter is under review by an inter-ministerial and inter-provincial committee led by the federal planning minister.