Breakthrough

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Last week witnessed two major happenings in the energy sector. While the Delhi owned NHPC completed its tunnel for the controversial Kishanganga project in Gurez, the state owned J&KSPDC settled its accounts with its promoter-buyer thus paving way for its fast run to the stock exchange, reports R S Gull

Sophisticated Tunnel Boring Machine (TBM) tunneled 14.75 kms from Bandipore side.

Sophisticated Tunnel Boring Machine (TBM) tunneled 14.75 kms from Bandipore side.

When Omar Abdullah, the chief minister, presided over the 70th Board of Directors meeting of the state owned J&K State Power Development Corporation (J&KSPDC) last week, a major breakthrough was managed. The government’s power department agreed to a major policy decision – rationalising the accounts with the PDC, a PSU that it promotes.

J&KSPDC is wholly owned PSU of the power development department (PDD) of the state government. It has perpetually been in red because it lacked ownership of a major project. But Baglihar changed its course, history and the prospects. Now it earns nearly Rs 380 crore profit.

Right now this PSU is the proud owner of 22 power projects, all excepting Baglihar small, and generated 3775.554 million units last fiscal.

But it has an interesting problem: its promoter-owner is its major energy-buyer. This crisis has dogged the growth of the PSU throughout. The government (read PDD) has been investing massively in its expansion and growth by managing equity part from its own kitty. There have been problems in managing the plan funds but never so grave that could threaten the PSU.

Once the PDD wheels away the generations of the J&KSPDC, it proves a bad pay master. It has rarely paid it fully for the energy it purchases. This has resulted in a peculiar problem: the balance sheet of the PSU has been dirty and unworthy. This problem had created a chain of crises. The worst one was that its unclean balance sheet had led to a lower ranking for the PSU. The corporation had been calculating its generations officially, making it part of the balance sheet and even paying tax for the income that rarely came from the PDD!

From the year 1998-99 to 2013-14, the PDD has paid Rs 1727.39 crore energy bill against the billed amount of Rs 4030.12 crore leaving Rs 2302.73 crore in arrears.

In comparison, the PSU received plan assistance of Rs 3406.84 crore from the PDD between 1995-96 and 2013-14.

Last week, a solution was finally agreed upon. The Board of Directors agreed to the idea that the arrears on account of sale of energy (Rs 2302.72 crore) be deducted from the received plan assistance (Rs 3406.84 crore). After deducting other liabilities, it created a situation that PDDs investment in the corporation had a net surplus of Rs 1419.47 crore.

The Board approved the idea that PDDs Rs 1419.47 crore be converted into 14194700 shares of Rs 1000 each. This was added to the paid up capital of five crore rupees.

For J&KSPDC, it was a Eureka moment. The decision cleaned PSUs balance sheet that will pave way for improvement in its overall rating – from A to A+. The credit worthiness of the corporation is up. Its earlier ranking would make it pay 0.5% more interest on its loans. An improved ranking dictated by a clean balance sheet would reduce the costs by 0.25%.

Omar Obdullah  chairing a top level meeting.

Omar Abdullah chairing a top level meeting.

For commoners, it might sound so small. But given the volume of funds that J&KSPDC requires from the market, the benefits are enormous. For the current fiscal (2014-15), the PSU is lifting Rs 749.56 crore from the market for its four upcoming projects: Rs 500 crore for Baglihar-II, Rs 66 crore for Parnai, Rs 65 crore for Lower Kalnai, and more than Rs 118 crore for New ganderbal. PSUs net outgo on loan repayment and debt servicing was Rs 433.25 crore in 2013-14 which is anticipated to be Rs 492.31 crore for the current fiscal.

J&KSPDC’s spent an amount of Rs 1870 crore last fiscal and its yearly spend on its overall operations is anticipated at Rs 3416 crore.

But the larger benefit of the decision would be felt in a few years when it becomes the second listed company from J&K after the J&K Bank. It has already tied up with various professional institutions to get listed and one of the key requisites for that was a clean balance sheet.

The second major breakthrough was reported from north Kashmir mountains in the central sector. The NHPC owned 330-MW Kishanganga project achieved a landmark when it completed its 23.24 kms head race tunnel, ahead of schedule. The Rs 1400 crore tunnel project was completed by specially designed machines and nearly 600 skilled workers who remained inside the burrow for four years, round the clock.

HCC project manager Arackal Benny said the tunnel part was completed ahead of schedule as work was going on from both ends – Gurez and Bandipore. While a sophisticated Tunnel Boring Machine (TBM) tunneled 14.75 kms from Bandipore side, the balance 8.90 kms was completed by traditional drill blast method (DBM) from the Gurez side.

This tunnel is a rare engineering marvel and one of the longest tunnels in Himalayas. It has 1470 meters of overburden, perhaps the highest for a tunnel in India. It envisaged exaction of nearly 7.7 lakh cubic meters of rocks from both ends.

The project diverting part of the discharge from Kishangaga rivulet to Bandipore would increase the level in Wullar lake and help NHPC generate more in its twin projects at Uri. Slated to be completed later 2015, it would nearly cost Rs 3700 crore.

Burrowing a tunnel in an invincible mountain apart, the major challenge before the HCC, the EPC contractor, was to get the gigantic 2100 Mt TBM to the spot. Designed specially by SELI’s Aprillia facility near Rome (Italy) in a year, the 200 meter long machine was transported in 145 containers in three lots and finally reached Mumbai and Ahmadabad in July 2010. Getting it to Bandipore slopes meant designing special vehicles that cab pass through the Jawahar Tunnel and later widen the roads all along the track. This part of the operation at the peak of Kashmir unrest took more time than anticipated.

After the TBM borrowed 1400 meters, the complex geology of the mountain led us to TBM choking situation which required three months to clear. As the tougher got going in an overwhelming situation, the TBM proved a huge accelerator. Against an anticipated progress of 156 meters a month, it ended up having a monthly average of 416 meters. In one month, it was even 816 meters – nearly a kilometer. The tunnel was completed with a loss of four workers and no other loss to the critical asset. In two cases, the TBMs were buried in the overburden in Kashmir Himalayas in one project.

HCC and Halcrow are the joint EPC contractors of the project that was arbitrated by the International Court of Arbitration after it was set up on basis of the compliant that Pakistan made. Islamabad lost its case in the court as the only relief it got was that India has to ensure nine cumecs of water flowing downstream round the clock. It will reduce the overall generations of the project by five per cent as the river discharge falls from estimated 1000 cumces to below 30 cumces for four months.

BHEL is managing project’s electromechanical part, German DSD Noel the hydro-mechanical part and Hyderabad based PEES takes care of certain things.

Over To Katra

Katra-Railway-StationNarendra Modi launched his campaign from Katra by riding a white horse to the cave shrine on March 26. Next week, the Prime Minister is expected to travel by train to the pilgrim town as Indira Gandhi’s cherished project is finally ready after a series of technological hiccups.

Though the Railways started occasional trial runs on the 25 kms track on December 7, 2013, from next week it will have a 16-wagon train chugging between Udhampur and Katra. Northern Railways General Manager Pradeep Kumar Aggarwal and DRM Railways NC Goel were on board the first full train that reached the town from Delhi. Problems highlighted at the alignment of Jhajjar Bridge and T1 tunnel by the Commissioner of railway Safety (CRS) have been addressed. This CRS report had deferred its inauguration by Dr Manmohan Singh on February 2.

This stretch of the ambitious Baramulla-Jammu railway line passes through mountains and valleys and is considered a technological wonder. It involves around 11 kms of tunneling, 9 major and 29 minor bridges which devoured more than Rs 1000 crore. The tallest bridge on this track is 85 meters high and the longest tunnel is 3.15 kilometers.

Its two tunnels caved in during 2007 and were rebuilt after lot of efforts involving foreign consultants.

Initially, the Railways is planning sending two trains to Katra directly, one each from Kalikaji (Chandigarh) and another from Delhi. In the second stage, some trains from Jammu and Udhampur will get go ahead and in the final stage the town will have connectivity with most of the Indian states.

Given the Katra being one of the busiest pilgrim spots in north India – it has more than nine million pilgrims a year, the project would help Hindu devotees to bypass Jammu and reach the town directly, a facility that would reduce part of Jammu’s business. By an average 30,000 to 40,000 pilgrims visit the cave shrine daily.

In this case, Railways is doing slightly more than connecting the people. They are planning running special buses from Katra’s Railway Station Ban Ganga, the base camp for pilgrimage. The shrine trust is planning opening three counters at the station for making biometrics cards of the pilgrims so that the rush at the existing counters reduces.

With the completion of the third stretch (two others being Baramulla to Banihal, Udhampiur to Jammu) of the ambitious railway line to Kashmir, it now has Banihal Katra stretch incomplete. Given the harsh geological conditions, this is expected to take more than double the anticipated investment in nearly a decade.

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