Gambling with Ganderbal

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As Kashmir is desperate for some light to improve its energy deficit, a controversy was crafted to delay implementation of Ganderbal power project, reports Masood Hussain

For historic reasons, Mohra power station has remained very important. Primarily it was because this was the Indian subcontinent’s second oldest power house. And then, it was this power house, the flickering lights of which marked a major change in the history of Kashmir in 1947 when tribal raids took place. For practical reasons, it was Ganderbal that remained the main bread and butter of the Kashmir’s quest for energy.

The survey and basic works for the Ganderbal project were carried out somewhere around 1946. But the situation changed and Hari Singh fled, the next autumn. It was somewhere in 1949 that the new government led by Sheikh Mohammad Abdullah revived the project. Revival was an interestingly long story. Civil works were carried out by the local work force and the engineers. But for the electro-magnetic part, it took some time for the government to locate the firm that had been entrusted the job of implementing this project.

Somehow, the first of two turbines were put in place in 1955, when Sheikh was already in jail. Third unit started generations in 1961. These were three turbines of 2 MW each. One of the rare machines having horizontal Francis turbines, these Escher-Wyss generators were being run by Hungarian Ganz Movag and British Metropolitan Vickers turbines. For almost three decades now, these systems have ceased to exist and no spears are available.

Much later, two additional units of 4.5-MW capacity each were added which shot up the overall generation from the project to 15 MW. Fed by 475 cusecs of Sindh waters, by a 14.60-km gravitation channel, it had some additions pushing the water capacity to 570 cusecs. Part of the water would come to Srinagar for drinking and part would go to irrigation of Gaderbal’s rice fields.

Continuous operations, however, impacted the overall machinery and it reached a stage when its generations dropped and it became economically unviable. The J&K State Power Development Corporation (SPDC) decided to go for its Renovation Modernization and Uprating (RMU).

The SPDC managers were in tension for some time because they had decided to get the Ganderbal project a cousin, the New Ganderbal, another run of the river project. Had they opted for RMU of the olden project with the existing capacity it would have impacted the new one’s output. Initially, they decided to reduce its capacity to 9 MW but further calculations pushed them too far, to only 4.5 MW.

The project is being implemented by an Uttrakhand based firm Gogoal Hydropower Ltd at a cost of Rs 6.65 cr. Though it was supposed to be ready by July 2016 because of the situation, its new deadline for completion is October 2017.

“Civil works are almost done,” an SPDC official said. “By this year end, it will be up and running.”

The survey for New Ganderbal was carried out as early as 1984. Its head works would be located at Preng, almost 80 meters upstream from where Old Ganderbal takes off. Designed to use 150 meters net head, it would take 76 cumecs of water to feed a 93-MW generation capacity and generate 399 million units of energy a year. What makes it different from Old Ganderbal is that it will have an 11 kms tunnel. The project continues to be multi-purpose as almost 6 cumecs of the discharge are supposed to reach Srinagar for drinking purposes, for which the state’s PHE department would contribute its bit, and an additional 23 cumecs will go for irrigation. CEC initially approved the DPR for 60 MW but a reappraisal improved its capacity to 93 MWs.

It was put to tendering on July 18, 2011. CEA gave its techno-economic clearance on June 10, 2014 at Rs 965.87 cr at January 2014 price level including interest during construction (IDC) of Rs 175.46 cr. By then, SPDC had signed the power purchase agreement (PPA) with J&K’s state power development department on April 22, 2013.

Six companies bid for the project (Feedback Infra Pvt. Ltd assisted in the process) which were opened on August 25, 2014. Hindustan Construction Company (HCC) emerged lowest bidder with Rs 820.77 cr; Noida based Coastal Projects Ltd bid with Rs 1083.18 cr; Hyderabad based Soma’s bid was Rs 1044.81 cr; Mumbai based Patel Engineering had a bid of Rs 872.28 cr; Mumbai based Simplex-Apex Econ Consortium’s bid was Rs 1113.21 cr and another Mumbai based company Gammon India Ltd sought Rs 1292.21 cr. The LI company gave a discount of 0.25% during negotiations on the civil works component. Then the project went into the governance maze.

Contract committee of the SPDC felt the bid was much higher than the CEC ceiling and the issue led to the process of re-negotiation with the LI. So the Board of SPDC decided that the case should be referred to a committee of administrative secretaries for negotiating with the LI. That was October 21, 2014.

As the process started, the secretaries were told the State Vigilance Commission has set certain principles for reappraisals with L1. By then it was December 2015 already. It was actually on March 10, 2016 when secretaries of power, planning and planning were asked to renegotiate with the HCC. By April 2016, the SPDC created benchmarks – which were closer to the CEC estimation – on basis of which the negotiations can happen. On June 7, 2016 it was decided that the HCC be approached to explain the difference between the bid cost and the cost calculations by the SPDC on basis of CEC approval.

When the LI team came for meeting on August 9, 2016, it explained the costing. No major changes took place barring a concession of Rs 1.59 cr. Finally the issuer was sent to the cabinet on October 21, 2016 but it could consider it only on April 28, 2017.  It set up a cabinet sub-committee comprising minister of power, finance, law and forests.

When the sub committee met on May 10, 2017, a lot had been reported in some preceding days. There were two concerns which were apparent. Firstly, the inordinate delay cost SPDC a lot, may be Rs 500 cr or more as Kashmir remained reeling under darkness for lack of capacity to wheel additional electricity from Northern Grid. The delay was attributed to the BJP that holds the power portfolio with Deputy Chief Minister Nirmal Singh as in-charge minister.

Secondly, the cost variation between the bid and the CES approval estimation was actually blown out of proportion. Interestingly, it was one PDP minister who was so keen that this balloon should fly too high that it must force a re-tender which will eventually cost four more years. This had put so much of pressure on the BJP that when the sub committee started meeting, there was a sort of storm. BJP wanted the project to the axed for a re-tender.

As the committee started a meeting, solutions emerged. Certain basics were explained like the CEC prices are a reference, as they are calculated in laboratory conditions. These are assumptions actually. Finance Minister Dr Haseeb Drabu said the government should not get panicky because CEC in literal terms has no legal standing in J&K. As the issue of pricing was taken up, the members, by and large, were convinced that the exclusion of EPC risk and many other things – which are unpredictable in J&K, does not make it expensive or illegal. Though some of the members suggested that the next meeting should be held to approve it, there was a strong insistence that it does not require that. Even the bureaucracy that was initially reluctant to go ahead, on basis of the observations on record, was convinced. As of now, this is the status of the project.

The report, once signed, will go to the cabinet and that will lead to a formal signing of agreement, But the project would require new costs as the escalations have already been there. Inside in SPDC suggest that the project could cost somewhere around Rs 1050 cr or may be more.

This project would take part of the investment in the tunnel part but it will make some saving as it does not require any major investment in creating road access. HCC, it may be recalled here, is the principle player in creating infrastructure in J&K. It set up the railway tunnel in Banihal, both the NHPC projects in Leh and Kargil (at a per MW cost which is much higher than the New Ganderbal) could ever be, as its 330 MW Kishanganga project is expected to be ready later this year. The major construction company would make a bit of saving by shifting part of its machinery from one project to another within the state as it enough of expertise to manage Himalayan geology.

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