As we stand powerless
JK Power vs Instruments of Accession
SURRENDERING WATER RESOURCES OF OUR STATE MEANS LOSING NOT JUST INDEPENDENCE, BUT HONOR TOO, WRITES ZEESHAN PANDITH
More relevant than the highly-debatable “Instrument of Accession” are so many other yesteryear as well as present-day instruments of accession/surrender for it is through these instruments that Kashmir has lost not just its independence, but its honour.
Noteworthy among such dishonourable instruments of accession are those that spell complete and shameful surrender of the State’s bountiful water resources. The 1960 Indus Water Treaty (IWT), for example, between India and Pakistan has stripped JK of its inherent right over its major rivers. How deplorable it is to have an existing law that prevents us from using water flowing right through our lands for power generation, let alone a basic activity such as irrigation.
Ironically, the JK government, for decades now, has been giving licenses for the use of the state’s waters to the National Hydroelectric Power Corporation (NHPC) without any “specific agreements” on the returns of the projects. It is interesting to note how NHPC stepped into JK. In July 2000, there was a MoU between the JK government and Government of India for seven hydropower projects and by virtue of this agreement NHPC was awarded these projects. According to sources who cite from the minutes of the meeting of this MoU, the following were some conditions placed: (a) the projects will be developed within ten years, (b) modalities of transfer details will be sorted out later, (c) that these projects will be on BOOT (Build-Own-Operate-Transfer) basis. Ten years hence, these projects have yet to be finished, the modalities of transfer details were never sorted out, and in the final copy of the signed agreement there was no mention of these projects being awarded to NHPC on BOOT basis. Bungling at its best. Prior to the seven projects, the NHPC had been awarded three hydropower projects (Salal 690 MW, Dul Hasti 390 MW and Uri 1 480 MW). According to sources there is no written document or an agreement between the JK government and NHPC on these three projects. In other words, JK government has turned a blind eye to the colossal looting of JK resources which is taking place---a grave economic crime against the people of JK state.
What self-respecting state government would be party to such reckless abandon? Apparently, the self-respecting State of JK. Even the Minister for PHE was quoted in yesterday’s news saying, “The criminal negligence by the successive regimes in JK has cost us dearly.”
No wonder that in spite of JK’s massive power-generating capacity, the common Kashmiri continues to be troubled daily by frequent power outages. Because of inequitable agreements as regards harnessing JK’s water resources for power generation made by the previous State regimes, the downtrodden Kashmiri has been suffering from power deficit for years, whereas the NHPC has been raking huge power exploitation-based profits at JK’s expense.
The said corporation was quick to celebrate the 94% jump in its consolidated net profit, a bulk of which comes from generating power using JK resources. Its chairman, S.K. Garg, was quoted as saying that the hydropower firm was looking to invest its surplus funds in the mutual funds market. Yet, in 2001, the same corporation was quick to challenge JK state government’s gazetted notification imposing a 50 paisa per unit levy cess on the use of the State’s water resources for power generation. Almost a decade hence, the gazetted notification has never been executed. What kind of leadership does not defend its people’s rights over its own wealth and resources? Apparently, a leadership working under various instruments which ensures that it accedes its own people’s rights to the interests of powers-that-be.
Let me cite another case in point. In April 2008, the state cabinet approved the draft MoU between NHPC and JKSPDC for three projects in Chenab Valley namely, Pakul Dal (1000MW), Kiru (600 MW) and Kwar (520MW). These three projects would be managed by Chenab Valley Power Development Corporation (CVPDC) which is a subsidiary of JKSPDC formed last year. In this agreement the shares of NHPC can be more than and not less than 49 percent while JKPDC’s share cannot be more than 49 percent but equal or less than 49%. National Thermal Power Corporation (NTPC) would hold two percent share holding in the JV. Both the NHPC and the NTPC are undertakings of the government of India. As the State will hold only 49%, outside corporations will hold 51% and consequently possess the decision making powers. This MoU has faced criticism from opposition political parties and trade bodies. Yet, such an unfair agreement continues to enjoy endorsement by the state government which argues that it is a good agreement because it provides 13 percent of ‘free power’ to the state government which includes one per cent meant for local area development. Out of the balance power, the state government has the right to purchase 49% power from the JVC at a price determined by a regulator. What some in JK are demanding is that the clause pertaining to the percentage (share) of JKSPD should be changed and should read, instead as ‘equal to and not less than 49%’ because of the fear that JKSPDC might end up having less than 49 percent if the State falls short of money.
Had water-use taxes been imposed on those big corporations instead of succumbing to NHPC demands, had equitable agreements been penned, had shoddy governance been checked and corrected, JK state would have attained its full financial potential. By this, JK would have had the gathered the strength —the power to be debt-free. For anyone who dreams of ‘azaadi’ -in whatever form it may be- should aspire for his territory to be debt-free. Even those nations that proclaimed themselves as ‘independent’ several decades ago have been chained to slavery by their former colonizers through an instrument of accession/control known as ‘debt’ in the wily guise of aids, grants, and economic packages.
The recent unrest in the Valley indubitably shook the state government from its comfy cushy complacency and conceit. The resonant call for ‘azaadi’ which embodies the ideals of independence, freedom, and justice , continues to echo in the streets of Kashmir, and has successfully pervaded the ivory towers of JK intellectuals and bureaucrats where it manifests in its corollary, ‘economic azaadi’.
Consequently, we hear the Chief Minister decrying the Indus Water Treaty. Further, he has requested the central government to increase the quantum of ‘free power’ to the state from a mere 12% to 25%. These forward steps are evidently novel and commendable---statements and actions that previous chief ministers have never even attempted. Yet, JK should not even be begging for a share of its own natural resources on its own terms.
Recently, the Water Resources Regulation and Management Bill was passed in the Assembly. Finally, what should have been done several decades ago, which is to impose tax on the water used for power generation in the state, will start to happen soon. This is, indeed, good news. However, this recent water bill still seems watered-down because it makes no mention of the previous ‘gazzetted notifications’ of a levy that was supposed to be imposed in 2001. In addition, there are ample reasons for JK to choose not to work with NHPC until the state sorts out the losses incurred from bungled dealings with NHPC in the past.
Now, here comes the Rattle Project, touted as innovative model of the power sector in Kashmir. As per the purchase power agreement (PPA) the State will get 15% as free power (instead of the erstwhile 12%), 48% levelized tariff at Rs. 1.40 per unit and on Build Operate and Transfer (BOT) basis and be given back to the state in 35 years. This project has been given as an IPP (Independent Power Project) to a private company in June 2010 to show that projects can be pushed through private companies. However, the state government has allotted more projects to NHPC on the sides.
The fact is, power projects can be conducted independent of NHPC. For example, the total cost of the three projects in Chenab Valley is Rs. 11,279.86 crores approximately for 6 years. It takes a hydropower project construction 6 years to develop. Thirty percent (30%) equity of Rs. 11,279.86 crores is Rs. 3,383.99 crores. Annual average requirement of equity is Rs. 563.99 crores. Seventy percent (70%) of Rs. 563.99 crores which is Rs. 394.79 crores will be the annual requirement which can be borrowed by the owner (JKSPDC and JK government) from Power Finance Corporation (PFC), REC, HUDCO or JK Bank. Therefore, the equity requirement of the owner would be Rs. 169.2 crores annually. The revenue generation of Baglihar 450MW-1 power project which is completely owned by the JKSPDC is generating enough profit annually to take care of these three projects of 2120 MWs. The lenders have shown interest in 3 hydro power projects of Chenab Valley as these are most viable, most feasible techno-economically as well as the cleanest form of energy. Now, why should the government do these projects on partnership basis with NHPC or any other company from outside the State?
As regards The Indus Water Treaty (IWT), it should simply be decreed as null and void by the people and the government of JK as the state was never party to it. It is atrocious that so-called democratic nations entered into a treaty to exploit the resources of a disputed territory.
JK laws should reflect the reality of the times. Several studies have shown that JK has a high potential of achieving economic self-sufficiency with the power sector as one of our most powerful tools. We do not have to chain ourselves to NHPC. The state can open up and work with other interested and equitable investors. Restructuring and reforms in the PDD are also a must. There are tenders in the PDD which have been pending for several years and which could have saved the State crores of money.
It may be too early to celebrate the recent passage of the new water bill and other pieces of news that seem to show us that everything will be all right with our economy. There is a need to be ever more vigilant against present-day instruments of accession disguised as laws, agreements, or development projects. There is gargantuan work that we have to do to regain control over our resources, our honour, our destiny.
The development of a nation reminds me of how Dr. Montessori describes the development of a child into a man as a series of ‘conquests’ of independence, and I quote, “Independence is not a static condition: it is a continuous conquest, and in order to reach not only freedom, but also strength, and the perfecting of one’s powers, it is necessary to follow this path of unremitting toil.”
(Zeeshan Pandith is an education worker and an environmental activist)
Lastupdate on : Tue, 9 Nov 2010 21:30:00 Makkah time
Lastupdate on : Tue, 9 Nov 2010 18:30:00 GMT
Lastupdate on : Wed, 10 Nov 2010 00:00:00 IST
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