State government no longer requiring counter-guarantee from the Central Government for inviting foreign investors for setting up hydropower projects is a significant development. The announcement in this regard by the two senior government officials augurs well for   meeting electricity requirements and strengthening of the economy of the state.  For its failure to harness its water resources, the state economy during past few decades has suffered immensely increasing its dependability on grants from the central government. According to most conservative estimates, the Jammu and Kashmir state has the capacity to produce 22000 MW of hydroelectric power. Many international agencies in the past had shown their willingness to invest in the power sector of the state but for the GoI refusing to give counter-guarantee,   the opportunity   for state tapping its own resources was lost.  Some internationally reputable agencies had concurred for funding of the projects and agreed to provide 85% assistance to the state for developing of these projects.  The State government had got concurrence for developing Kishanganga and Uri II power projects from the companies, which had developed Uri I. In addition, for Seva the concurrence had come from the Seva Power Consortium. The refusal for counter-guarantee by GoI by all stretch of imagination was motivated as it resulted in all major projects going to the NHPC over the years at their terms and conditions. The state in 2000 only had to handover seven projects to the NHPC, these included 240 MW Uri, 330 MW Kishenganga, 120 Mw Seva II, 1000 MW Bursar, 1020 MW Pakaldul, 44 MW Chitak and 45 MW Nemo-Buzgo according to its terms  conditions, that in no way are beneficial to the state. The Civil Society in the state has been highly critical of the exploitation of the state resources by the NHPC and this discourse is getting louder.  Now when there is no need for counter guarantee some international companies have shown interest in investing in the power sector the state government needs to revisit its earlier agreements with NHPC for entering into fresh agreements with international agencies to the advantage of the state. 

Lastupdate on : Mon, 11 Jun 2012 21:30:00 Makkah time
Lastupdate on : Mon, 11 Jun 2012 18:30:00 GMT
Lastupdate on : Tue, 12 Jun 2012 00:00:00 IST