Centre says no to state share in NHPC profits, asks Govt to 'change mindset'

Centre says no to state share in NHPC profits, asks Govt to 'change mindset'

Piyush Goyal remains non-committal on return of power projects, rules out revision of royalty agreements, says need to go by rules of the game

Union Power Minister Piyush Goyal Monday bluntly opposed the J&K government’s demand of approving a share in profits of National Hydroelectric Power Corporation to Jammu and Kashmir.

The Minister also ruled out revision of royalty agreements between State and NHPC on Corporation-owned projects in the State while making no assurance on transfer of two hydropower projects –Dul Hasti and Uri-I—to J&K.

The Minister’s rebuff—which came during a meeting called here to review performance in state power sector—is a major blow to the PDP-BJP’s Agenda of Alliance—the guiding framework for the Government to run the State—in which the coalition partners have agreed to pursue the issues with New Delhi.

“They (NHPC) have projects all over the country. If you want to change rules of the game, why will they invest here? It doesn’t make any sense (to talk of) securing share in the NHPC profits and revision of royalty agreements,” said  Goyal who is the Union Minister of State for Power (Independent Charge), in his response to the state’s demands while chairing the meeting.

J&K’s Power Minister, Nirmal Singh, Minister for Animal Husbandry, Sajjad Lone, top officials from Union Power Ministry, NHPC, State’s Principal Secretaries for Power and Finance and authorities from State’s Power Development Department and Power Development Corporation attended the meeting which lasted for more than five hours.

At present, the State gets 12 percent power free as royalty 


from NHPC-owned projects while Government has been demanding that it should be increased to 25 percent. It has also been pressing for revision of all agreements on NHPC-owned projects after recommendations for the same by a cabinet subcommittee during the previous Government.

The Union Minister however opposed both the demands. “If I was in your shoes I would look for possibilities to explore 10000-MW hydropower energy without bothering who is setting up the projects. The State will then get roughly 1200 MW free power out of 10000 MW which means power worth Rs 2500 crore annually,” said Goyal. “I think (State) needs to change its mindset and think positively. My suggestion to you will be to explore ways for tapping 10000-MW energy and getting 1200 MW free power.”

In the Agenda of Alliance, the PDP-BJP have agreed to explore modalities for transfer of 390-MW Dulhasti and 4890-MW Uri-I hydro power projects from NHPC to J&K, secure a share in profits of NHPC from its projects in the State and revise all royalty agreements between State and NHPC. The three issues were part of power point presentation made by state authorities before the Union Minister to brief him about the scenario in the power sector.

“You have to go by the rules of the game otherwise no banker will come to invest in J&K because there will be no guarantee (provided by Government of India),” Goyal pointed towards the state officials.

J&K’s Power Minister and senior BJP leader Nirmal Singh who was sitting besides the Union Minister remained silent as Union Minister made the remarks.

Goyal asked the State Government to “decide all these things” before taking up any other project with NHPC. The Corporation, which is a subsidiary of Government of India, is presently executing three projects in joint venture with State Government on Chenab River Basin in Jammu with a cumulative generation capacity of 2100 MW. It is also setting up Kishenganga hydropower project in Bandipora while the Corporation’s power kitty has grown to 2009 MW in JK, highest in any State.

As the Union Minister was making his observations, a senior NHPC official informed the meeting that State was getting 1200 million units of free energy from NHPC-owned projects in the form of royalty and the Corporation was paying water charges of Rs 600 crores annually to the State against tapping of water resources for energy generation.

“They are getting 50 percent share from total profits earned by NHPC,” he said. State’s bureaucrats and other top officials who were present in the meeting listened silently to the observations made by NHPC official.

Quoting the figures of the NHPC official, the Union Minister pointed towards State Government authorities present in the meeting.

“The NHPC is completing its project (Kishenganga) next year. Why don’t you (State) pay the cost of projects owned by NHPC in J&K and also pay against their shares in the Chenab Valley Power Projects company. Buy them all and stop NHPC, there will be no issues,” the Union Minister remarked.

He said it (providing share from NHPC profits to state and revising agreements between JK and the corporation on the projects) would send a “message to investors that their shares are not secure.”

“If you try to fiddle with listed companies it will send wrong message,” said Goyal.


The Union Minister didn’t comment on the State Government’s demand for transfer of 480-MW Uri and 390-MW Dulhasti power projects to the State, saying the issue involved too may ministries.

“It is too much of an inter-ministerial issue and this is not a proper platform to discuss it,” said Goyal.

Earlier this year the Union Power Ministry informed the parliament that it can’t transfer the two power projects owned by NHPC to Jammu and Kashmir, citing ‘legal and financial problems.’ 

The Union Minister however agreed to support the state on its demand for allotment of dedicated coal mine in Madhya Pradesh to J&K with coal reserves of not less than 150 MMT for setting up a pit head thermal plant with equity support from Government of India, restructuring and strengthening Chenab Valley Power Projects Limited as a holding company for all hydro power projects in the state and ensuring J&K a share in one of six Ultra Mega Thermal Power Projects.

“There are good suggestions like allotment of dedicated coal mine and restructuring of Chenab valley Company. We will support you there,” Goyal told State officials.