A public discourse over J&K’s energy crisis has brought NHPC into sharp focus. A cabinet sub-committee, that revisited the history of the company’s ‘exploitative’ relationship with the state, has brought some uncomfortable facts to the fore illuminating the various state governments’ inability to negotiate well with the hydro-power giant. A KASHMIR LIFE report.

National Hydro Power Corporation (NHPC), India’s hydropower major and J&K government have had a long relationship. The corporation was actually born with the award of Salal Power Project, located in Reasi. Initially, it acted as an agent of union power ministry to handle the project and subsequently the asset was transferred to the hydroelectricity giant.

Almost a century after India and Pakistan signed the Indus Water Treaty, Kashmir, is now fully awareof the losses it suffered in “India’s national interest”. Demands for compensation are being raised from either side of the ideological divide of Kashmir’s politics. Even a former chief minister has written formally to the Prime Minister about it. People on the street link the expansion of the NHPC in J&K as part of the unwritten ‘resources exploitation’ plan. Last summer a senior Congress minister in Omar Abdullah’s government termed NHPC as “an East India Company”.

By now, NHPC has four operational stations with a cumulative installed capacity of 1680 Mega Watts (MWs)in J&K which offer it nearly half of the total electricity generation it sells annually. Of the five other projects (1719 MW) shifted to the corporation for implementation in July 2000 later, three (369 MW) are at an advanced stage of implementation as work on 330-MW Kishangaga goes on amid a dispute between India and Pakistan being currently heard by the International Court of Arbitration as one in Doda region is yet to see the survey completed. Besides, NHPC and J&K have 49% stake each in three other projects with a cumulative capacity of 2120-MW that are being implemented under the Joint Venture (JV) Chenab Valley Power Projects Ltd. India’s Power Trading Corporation (PTC) holds the balance two percent equity.

A proactive Kashmiri civil society created a situation by exposing partly the historic documents suggesting the NHPC skipped adhering to the terms and conditions that the erstwhile state government had set for it, especially on Salal. They went to the court and used the RTI route to access certain documents showing the NHPC lacked any agreement with the state government thus suggesting that its operations were illegal. Caught on the wrong foot, the state government was forced to revisit the records of its decades-old relationship with the NHPC. The government set up a cabinet sub-committee (CSC) on May 26, 2011 with a specific mandate to “look into various issues arising from the terms and conditions of entrustment of the hydroelectric projects to the NHPC in the state.”

Looking into the issue, the CSC has done some value addition to the overall debate but has not discovered much that could offer energy deficit J&K a breather.

Dr Farooq Abdullah

It is the cabinet order No 328 of June 21, 1975 that, according to the CSC is fundamental to the entire relationship because it offered state’s terms and conditions for a relationship on electricity sharing with the central government. But this file is missing from the records of the state government. And, this fact has not been talked about for the first time in the cabinet. On December 13, 1984, the state government sent a draft to the cabinet indicating that the particular file is missing. In 1995 when the government was processing a proposal for NHPCs exemption from the Stamp Duty, the department informed the law ministry that the agreementwasmissing.

The CSC has also failed in tracing that file. Terming it a “serious matter”, the CSC sees a larger plot when it says the importance of the missing file cannot be overlooked because Sheikh Abdullah “had returned to power after a gap of more than two decades”. The CSC has actually recommended constitution of a Task Force led by a senior officer to look into the “circumstances leading to the misplacement of the records pertaining to this important cabinet decision.”

A subsequent file (a memo to cabinet dated October 28, 1980) pertaining to the Dul Hasti power project, however, bears a reference to the missing file. It mentions that after the cabinet took a decision, the conditions and terms were conveyed to the central government on July 21, 1975 in a letter (PD-IV/234/72).


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