Powerlessly Energetic Era

Rationing and frequent outages is order of the day in Kashmir valley but these do not define the energy futures J&K is limping towards, RS Gull reports.

As They Said…

Mufti Muhammad Sayeed

“It (Kashmir issue) was not resolved in 60 years and they cannot be resolved in one meeting but it will be part of a process. There are a few elements in our country which against reconciliation between India and Pakistan.”

Mufti Mohammed Sayyed, patron PDP, while suggesting Manmohan Singh, the PM, to accept Pakistani President Asif Ali Zardari’s invitation to visit Pakistan which can reduce the trust deficit between the two nations which deepened after Mumbai attacks.


For energy-deficit Kashmir, year 2012 began with a ‘power murder’. Residents of Boniyar, literally Kashmir’s energy capital, were protesting against erratic supplies that CISF guarding the Uri-I headquarters, opened fire on them. Of the three injured, Altaf Sood, 24, died. But the murder did not stalk the sector that witnessed many major developments, later.

A pro-active J&K State Power Development Corporation (SPDC) hoping to be key player in India’s quest for clean energy is making Rs 500 crore profit for the first time in its history. A slew of measures define its dynamism.

The work on 450-MW Baglihar-II has begun and the project will be ready by 2014. Ratle project bagged by GVK Development Projects Ltd for implementation on Chenab near Kishtwar on the basis of tariff bidding witnessed a reappraisal, pushing its capacity from 690 MW to 850 MW and also got environmental clearance. This BOOT (Build, Operate, Own and Transfer) project will return to the state after 35 years.

Under independent power producers (IPP) scheme that was slightly amended last year, the SPDC awarded nine projects – Ans-I (40 MW), Bichlari (45 MW), Kanzil Wangath (27 MW), Girjin Ki Gali (12 MW), Chandanwari Uri (7 MW), Dah (9 MW), Hanu (9 MW), Parnai (37.5 MW) and Pahalgam-II (1.5 MW) of which 16 to 21 percent would come as royalty to PDC for 35 years besides 30 percent of the generation at competitive costs.

As the year was drawing to a close, the government agreed to a wider opinion of the industry that policy must change again. As SPDC sought local investment in the energy sector at micro level, the industry sounded positive but said they being first generation entries into the energy sector, the precondition for them having strong energy background and turnover should be omitted. Chief Minister has agreed and the state subjects bidding for smaller projects will not be judged for their energy background. They will have to hire experts locally, however.

A policy intervention finally unbundled the energy sector. Right now, SPDC takes care of the overall generation as the Power Development Department (PDD) manages almost everything else. Under the new set-up approved this summer, the government will set up four more companies – one exclusively for transmission, one for trading and two for distribution – one each in Kashmir and Jammu regions. It might still take some time but the idea is to make people accountable and ensure they mint money for the service they are delivering.

Presently, the energy scene is discouraging. In 2011-12, PDD put its costs on the overall service at Rs 3100 crore but could pocket only Rs 1203 crore, leaving a mismatch of Rs 1900 crore. For this year, it exceeds by Rs 400 crore. PDD is unable to manage transmission and distribution loss. The magnitude of theft is so huge that 543 inspections by the middle of November led to detection of 125 MW concealed load and invariably it was the PDD official who was responsible – selling energy at discount. This load is being levied on the metered consumers through highly questionable voluntary load disclosure scheme after the tariffs were increased by an average 6.5%.

Rest of the energy sector was dominated by the NHPC and Taj Mohi-ud-Din. Its Uri-II project got delayed because of labour unrest for 105 days. The central PSU was unwilling to take locals on rolls. Its twin projects in Ladakh have also been slightly delayed as it is waiting for the final verdict on 330 MW Kishanganga project from the International Court of Arbitration. The project has already triggered a series of ecological and labour crises in the Gurez-Bandipore region.

The battle between the NHPC usurping state’s energy potential at no costs and the state government asserting its rights reached a new high. A sub-committee submitted its report to the cabinet recommending buying back three of the four NHPC projects – Salal, Uri and Dul Hasti. It also brought on record that crucial documents related to J&K’s relationship with NHPC are missing (two Kashmir Muslim officers who later served NHPC are held responsible) from government’s archives.

NHPC is paying its ‘water usage charges’ to the State Water Resources Regulatory Authority (SWRRA) that now former chief secretary S S Kapoor heads in Taj’s ministry. By now, it has received more than Rs 1000 crore. This season, Taj managed a change in the SWRRA Act that will enable use of this ‘disputed’ money on the buyback of power projects.

But Taj’s energy wars hit two dead ends. Firstly, suspected militants attacked the Tulbul Navigation Lock Project site. Though work was resumed on the revived project, Islamabad recently issued a statement saying the project can impact bilateral relations. Secondly, the cabinet skipped approving his Ravi Canal Project that envisaged a short-cut for lifting the state share of water from Ranjit Sagar dam, a project Punjab built literally in J&K on Ravi but skipped sharing benefits with J&K. Taj’s decision of lifting the water-share has already hit Punjab’s Shahpur Kandi project with Planning Commission refusing money. But Omar’s cabinet wants to listen from solicitor general on the issue before approving it!


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