Despite opposition, J&K inks pact with NHPC to execute 850 MW Rattle power project

Starting the process to set up another joint venture company between the national hydroelectric power corporation (NHPC) and the Jammu and Kashmir power development corporation (PDC) for execution of Rattle hydroelectric power project, the state government has signed a memorandum of understanding (MoU) with the central agency over the 850-MW project, which has been described as “most doable” in the state.
Despite opposition, J&K inks pact with NHPC to execute 850 MW Rattle power project
Representational Pic

Starting the process to set up another joint venture company between the national hydroelectric power corporation (NHPC) and the Jammu and Kashmir power development corporation (PDC) for execution of Rattle hydroelectric power project, the state government has signed a memorandum of understanding (MoU) with the central agency over the 850-MW project, which has been described as "most doable" in the state.

The MoU was signed by Balraj Joshi, NHPC's CMD on behalf of the Corporation, and Hirdesh Kumar, commissioner/secretary state power department, on behalf of the J&K government, on Saturday, a source said.

On Sunday, the MoU was formally exchanged among top officials of the NHPC, power development department and PDC, for execution of the project, in presence of Prime Minister Narendra Modi during a rally at Vijaypur in Samba, an official press release by the NHPC said. 

The state was represented by Hirdesh Kumar during the function.

Last week, Greater Kashmir had exclusively reported about the proposal, which was being pushed by the union power ministry. As per it, the NHPC would own 51 percent shares in the company while the PDC's shares will be 49 percent. Though the proposal was part of agenda during last meeting of the state administrative council (SAC), there was no mention about it in the official statement released by the state information department about the decisions taken during the meeting.

Several top officials of the power department said they were clueless about the outcome of the proposal in the SAC. 

Commissioner/secretary Kumar, who signed the MoU on behalf of J&K government, didn't respond to repeated calls from Greater Kashmir Sunday. A senior official said earlier there was another proposal to name the new JV Company as 'Rattle Hydroelectric Power Construction Corporation'. But, he said, there were "suggestions from some quarters" later to name it as 'Jammu Development Power Corporation'.

Rattle is considered to be one of the most "viable, attractive and doable" projects in the state. The project remained mired in controversies from the beginning. While the contract for execution of Rattle was won by Hyderabad-based GVK Power and Infrastructure Limited in 2010, the company left the project midway in 2014 owing to "controversy over high tariff rates". The GVK had bagged the contract on BOOT (Built, Own, Operate and Transfer) basis for 35 years.

Later the PDC, which owns 23 hydropower projects with capacity of over 1200-MW, showed keen interest in executing the projects. 

"But, both union power ministry and NHPC were keen that it (NHPC) should be made a partner in developing the project," said an official.   

Ultimately, the state administration in November last year proposed five models of joint venture for the project, with 15 percent to 25 percent free power to Jammu and Kashmir. The ownership propositions proposed between the state and the ministry were also in favour of the state—90:10, 75:25 and 51:49. Under 90:10 pattern, the free power proposed was 15 percent, while under 75:25 and 51:49 models, the percentage of free power suggested is 15 and 25 respectively.

But the 51:49 ratio proposal that was supported by the union ministry was in contradiction to the models proposed by the state. Under the fresh proposal, the project has to be returned to the state after 25 years of its commissioning, against seven years proposed by the state.

Coming up on river Chenab at Drabshala in Kishtwar, Rattle was scheduled for completion in 2017 at a cost of Rs 6000 crore.

This will be the second JV Company to be set up in the state between the PDC and the government of India's power generation companies for exploitation of hydropower resources in the state.  Already, the Chenab Valley Power Projects Limited, a joint venture company between NHPC, PTC and PDC, has been handed over three projects with cumulative capacity of 2100-MW. The NHPC has minimum of 51 percent shares in the company while PDC has 49 percent shares. The remaining two percent shares are owned by PTC. Besides, the NHPC owns eight hydropower projects in the state, with a cumulative capacity of 2339-MW, which is one-third of total energy generated by the Corporation in all states.  

On January 30, National Conference vice-president Omar Abdullah had opposed handing over of Rattle project to NHPC, saying the "sell-out" of a viable power project will have "long term negative implications on the state's economic growth". "Any such sellout will inevitably cause immense damage to the state and undermine economic interests of the state. Governor must rethink this decision and issue necessary directions to the concerned to put a stop to any such a move," Omar had said, saying the project can exclusively be run by the PDC.

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