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Ratle power project: Govt proposes joint venture with Union power ministry.

The Governor’s administration has proposed to union power ministry a joint venture between the state and the central government for execution of 850-MW Ratle hydropower project, a month after the Jammu and Kashmir state administrative council gave a go-ahead to it.

The project was initially slated for completion in 2017, but controversies and consequent delays would now push its commissioning to 2022 if the union power ministry agrees to the latest proposal.A top source said the government has proposed five models of joint-venture under which the state would receive 15 to 25 percent free power from the Ratle project.“So far there has been no response from the union power ministry but we are expecting a meeting between two sides in coming days,” said an official.

“If the ministry agrees to any of the models it is advantageous for the state since most of the projects conceived years ago haven’t seen any progress as far as execution is concerned.”The ownership propositions between the state and the union are 90:10, 75:25 and 51:49.

Under 90:10 pattern the free power proposed is 15 percent. While under 75:25 and 51:49 models, the percentage of free power suggested is 15 and 25 for each of the two models.The proposal, submitted last month says the project has to be completed in five years and returned to J&K state after seven years from date of commissioning, an official said.

The project has remained mired in controversies from the beginning. While the contract for execution of Ratle 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. While the work on the project was taken up in 2012, the company completely suspended the work in July 2014.

Coming up on River Chenab at Drabshala in Kishtwar, Ratle, 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 it would also result in loss of energy as the project construction would now stretch beyond 2022.

In 2001 the J&K state government and union power ministry entered into an agreement for execution of seven power projects by NHPC in the state.  The two parties also agreed that the terms and conditions for return of the projects to J&K would be discussed later.

But, even 18 years on from then, conditions for return of the projects were never discussed.Another official said, so far there has been no clarity on who would partner with J&K Power Development Corporation for formation of joint venture to set up the project.

In July this year, decks were being cleared for entry of yet another central hydropower company, Satluj Jal Vidyut Nigam Ltd (SJVNL), like National Hydroelectric Power Corporation (NHPC) into J&K to partake in joint venture projects with PDC which has the potential to execute power projects on its own.

Established in 1998, the SJVNL is a Joint Venture company between union power ministry and government of Himachal Pradesh.In response a question whether the joint venture company would be awarded more projects if the proposal matures, the official said: “Ratle is the beginning…obviously if a company enters the state with vast hydropower resources it will prefer to exploit the resources and benefit from it.”

The government of India’s NHPC, another central public service undertaking (CPSU), is already operating eight projects in the J&K with a cumulative capacity of 2339-MW, more than 1/3rd of the total of 7047-MW hydropower generated by the it outside the state.A joint venture company, Chenab Valley Power Projects Ltd (CVPPPL), already exists between PDC, NHPC and Power Trading Corporation (PTC) which was set up in 2011 for execution of hydropower projects on Chenab basin with a vast hydropower potential.  It has already been awarded for execution three major projects with a capacity of 2100 MW.

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