Rich Potential – Poor Politics
How our governments have pushed us to poverty
JUNAID AZIM MATTU
Successive governments in J&K have sold our most vital natural resource for a pittance and have deliberately chosen to not utilize our hydel power potential, avowing this State into poverty and dependence. Natural Resources are the collective assets of the citizens of a nation. It is them and them alone who have a right to use their natural resources for the growth and development of their nation. While God gave Saudis vast resources of petroleum, He gave Kashmiris vast resources of snow and glacial reserves. Saudis used their natural resources to usher their nation into an era of economic and infrastructural prosperity while our successive governments sold our snow and water resources for a glorified minute allowance called “royalty” while submerging our own State into an unending string of deficits, packages and assistances. Successive NC and PDP governments have sold Kashmir’s shot at prosperity and self-reliance for an embarrassing economic and political “royalty” to reap the blood-soaked dividend of manipulative, destructive political salesmanship.
Most of the power projects that are functional in our State come under central control. Our State gets a meager “royalty” from these power projects, the terms of which were badly negotiated by our corrupt, plundering politicians. Before we blame NHPC and New Delhi, we need to look inwards and hold our successive Chief Ministers accountable for bartering our future at the altar of political favor. The other dilapidating factor is the Indus Water Treaty between India and Pakistan. Rivers Jehlum, Chenab and Indus in our State are governed by the Indus Water Treaty (IWT), which was signed “in exclusion” of the people of Jammu & Kashmir in 1960 and includes the dimensions of a macro water sharing agreement across Punjab and J&K. The IWT was drafted without considering the interests and proprietary rights of the people of J&K over their natural resources, thanks to Sheikh Mohammad Abdullah, the then Chief Minister of J&K and his more-loyal-than-the-King relationship with the Indian National Congress and the power-establishment in Delhi. Under the legal statutes and ambit of the Indus Water Treaty, we cannot construct storage (reservoir) power projects on Jelhum, Indus and Chenab – rivers which hold in their bosom J&K’s potential to be a prosperous, self-reliant State.
The power projects executed and operated by the State of J&K are mired with “cuts” for Chief Ministers and Ministers, administrative inertia and a rusty red-tapist bureaucracy. Work on some of these proposed projects has been on for decades without any end in sight.
The total demand for power in J&K is between 1700 to 2200 MWs approximately. Our Installed Capacity, for all practical purposes is less than 500 MWs, while as our Available Capacity is around 340 MWs in summers and around 200 MWs in winters. This includes the enormously expensive contribution by operating our two gas turbines which, while fully functional provide the State with 140 MWs. These are the same gas turbines that are pressed into service when the State witnesses a seasonal public anger against power-cuts and bad governance. All other power generated beyond this installed capacity of less than 500 MW is run and operated by the Central Government. The State of J&K, to meet the gap between the available capacity and demand, buys power worth around 1000 – 1500 crores every year from the Central Government. This, considering our total hydroelectric potential of around 20,000 MWs (DESPITE adhering to the Indus Water Treaty) is a gut wrenching fact. J&K total power potential IF the Indus Water Treaty (IWT) were to be re-drafted to be fair would go up to around 25,000 MWs.
The Total Expected Revenue that J&K could earn by exporting the surplus 18,500 to 20,000 MWs of energy would be around 16,000 to 26,000 crores per year at current and forecasted future rates. Since J&K is missing the necessary power infrastructure to produce these 20,000 MWs of hydel power, the State (at 8 crores of cost per MW) would require a total capital investment of around 160,000 crores to give us an installed capacity of 20,000 MWs. By the yardstick of comparative study of such projects elsewhere, it’s estimated that around 60% of this total capital expenditure, which amounts to around 96,000 crores would find its way back into the local economy in lieu of compensation for land acquisitions and the creation of around 120,000 skilled and unskilled employment opportunities.
Reliable institutes, through scientific assessment and surveys have identified around 16,000 MWs of power generating projects on Rivers Jehlum, Indus, Chenab and Ravi. Pertinent to note here that River Ravi doesn’t come under the jurisdiction or ambit of the Indus Water Treaty. The break-up of J&K hydel power potential is 2066.81 MWs, 3576.55 MWs, 10375 MWs and 225 MWs for rivers Indus, Jehlum, Chenab and Ravi respectively, amounting to a total power potential of around 16,243 MWs. Almost 99% i.e. ovr 16,000 MWs of our hyde power potential is in the Rivers Indus, Jehlum and Chenab – ALL three tragically governed by the IWT which renders this collective potential virtually off-limits. The Indus Water Treaty restricts the permissible storage (reservoir) capacity on Indus, Jehlum and Chenab to 0.40 Million Acre Feet (MAF), 1.50 MAF and 1.70 MAF respectively. On these three rivers, the State of J&K (India under the IWT) is allowed to operate only run-of-the-river power projects. Due to the IWT, the total energy loss on the URI and SALAL power projects is around 44% and 15% respectively. The absence of storage discharge due to the regulations of the IWT results in the immediate loss of around 50% power generation capacity on the JEHLUM and URI power projects, especially in winter months. The Available Capacity, in the present scenario, goes down by around 66% in winter months due to low river discharge.
The glaring shame is that EVEN while the IWT is in place, the State can produce and export a surplus of around 1000 MWs or 2920 Million Units of power a year, giving the State revenue of around 900 to 1300 crores at reasonable, apportioned rates and terms of sale. Despite the Indus Water Treaty, J&K can earn a total possible revenue in the range of 15,000 crores to 24,000 crores if we exploit the permissible storage capacity and other possible run-of-the-river projects of Indus, Jelhum, Chenab and Ravi. This revenue translates into around 3 to 4 Billion U.S. Dollars annually.
The important aspect in assessing and discussing the hydel power potential of J&K is the total amount of capital investment it would take to reach an installed and available capacity of 20,000 MWs. This capital investment of around 160,000 crores would ideally, again from comparative research and study, would be earned back by the State through revenue earned from power exports in around 8 to 9 years. So the total cost of a hydel project can be earned back by the State Government in 8 to 9 years. This equation is ironical in a State like J&K where governments pay 1000 – 1300 crores a year to buy power from the Central Government and where State planned power projects take a good two decades to jump out of bureaucratic cupboards.
J&K can produce around 20,000 MWs of hydel power DESPITE the Indus Water Treaty (IWT) and around 25,000 MWs of hydel power if the treaty were to be re-drafted. This, as stated, translates into an annual revenue of around 3 to 4 Billion U.S. Dollars, which – being a recurring, stable income – would make J&K one of the most self-reliant, developed and prosperous States in the sub-continent. This would require a private-sector growth. The public sector cannot invest 160,000 crores to generate a collective capacity of 20,000 MWs. Most of these possible hydel projects could be constructed and pressed into service on robust, beneficial Private Public Partnerships (PPP), as is being done around the country. A phase of the Rattle power project is being developed on a PPP model with the GVK group. There are strong apprehensions and rumors of staggering kick-back that the powers that be in the State have received in the allotment of this project. All around the world, PPP has changed how States develop their infrastructure effectively – both in terms of cost and quality. Unfortunately, the present political system in our State will find ways to make PPP look bad given their habitual and inherent addiction to corruption and loot.
J&K can prosper, IWT or no IWT. We are not dependent and fiscally deficient due to New Delhi, Islamabad, IWT or the visible and invisible chains of conflict alone. We are primarily poor and underdeveloped due to our successive State Governments, our traditional political parties and the families that run and operate these parties and this State as a fiefdom they have inherited. Our coming generations can inherit a developed, prosperous J&K – the ball is in our court – economic persecution or political revolution – let’s make a choice.
***Excerpts, Figures, analysis and comparative research taken from “Achievable Nationhood – A Vision Document on Resoluion of the Jammu & Kashmir Conflict” by Sajad Gani Lone – Chairman, J&K Peoples’ Conference***
(Junaid Azim Mattu is the Srinagar District President of J&K Peoples’ Conference. Ideas expressed are personal. Feedback at firstname.lastname@example.org)
Lastupdate on : Fri, 15 Jun 2012 21:30:00 Makkah time
Lastupdate on : Fri, 15 Jun 2012 18:30:00 GMT
Lastupdate on : Sat, 16 Jun 2012 00:00:00 IST
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