With Jammu and Kashmir under president's rule, decks are being cleared for setting up a new joint venture company between the National Hydroelectric Power Corporation (NHPC) and J&K power development corporation for execution of 850-MW Rattle hydropower project, a source said on Monday.
As per the proposal, which has backing of the prime minister's office and the union power ministry, the NHPC would own 51 percent shares in the company while the PDC's shares will be 49 percent.
A senior official said the authorities at a "certain level" in the governor's administration were "very keen" to get the proposal approved from the state's side.
Usually, any policy matter regarding the PDC is put before the corporation's board of directors for the final call. But, the official said, the agenda about the state-owned Rattle, considered to be one of the most "viable, attractive and doable" projects, was circulated individually among the board members. The latest proposal is in contrast to the one taken up by the state administration with union power ministry in November last year. That time, the state had 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.
Under each of the models, the project had to be returned to Jammu and Kashmir after seven years of its commissioning.
"Under the latest proposal, there is not only the change in terms of ownership of shares, it has also been proposed that the project will be returned to the state after 25 years," said the official. He said there was however a clause in the proposal that the state could buy back shares from the NHPC five years after its commissioning. But given the financial position of the state that continues to slide in absence of any major source of revenue, this option could remain limited to papers only, the official said.
Though nothing has been finalsied yet, another official said, the interest shown by union ministry in involving NHPC in construction of the project may not face any resistance, particularly when J&K is under direct rule of New Delhi at the moment.
Things are expected to become clear during Prime Minister NarendraModi's visit to J&K later this week when he is scheduled to inaugurate some power projects, said the official.
This will be the second joint venture company to be set up in the state between 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, 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.
The project has 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, it 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.
Coming up on river Chenab at Drabshala in Kishtwar, the Rattle, considered to be one of the most "viable, attractive and doable" projects in the state, was scheduled for completion in 2017 at a cost of Rs 6000 crore.
However, four years of delay has not only pushed the project cost up but would also result in loss of energy as its construction could now stretch beyond 2022.