Thursday, July 31, 2008

JK should seek participatory sharing of power from 3 eastern rivers’

INDUS WATER TREATY

NASEER A GANAI

That the Indus Water Treaty between India and Pakistan is inflicting recurring heavy losses to Jammu and Kashmir is widely acknowledged. But, is there a way to seek compensation from the government of India for this treaty?
“Yes, the state government should ask for full participatory sharing of power generated on the three eastern rivers from New Delhi,” says a senior government official, pleading anonymity.
Under the treaty, the eastern rivers - Sutluj, Beas and Ravi - of Indus Basin, which pass through Himachal Pradesh and Punjab, have been made available for unrestricted use by India for utilization of water for irrigation and power generation. The three western rivers - Chenab, Jehlum, and Indus - which flow through Jammu and Kashmir, have been made available for unrestricted use by Pakistan. The fallout of restricted storage of water and run of river power generation is that the installed capacity of the hydel projects in Jammu and Kashmir is drastically reduced.
Senior officials of the Power ministry say that the restriction imposed by the treaty has resulted in colossal loss of power to the extent of 15000 megawatts to Jammu and Kashmir.
Had the storage of water on these rivers been permissible, it could have been utilized to store the summer discharge, which in turn could have boosted the generation capacity during winter when the energy demand shoots up particularly in the valley.
For the projects like 450 mw Baghilhar Hydro Electric Project, the officials said, the annual loss of energy was estimated at 1000 MUs accounting for a whopping Rs 200 crore because of the treaty and for the life of the project the loss would amount to Rs 7,000 crore.
Presently, according to revised estimates, the hydroelectric potential is 20,000 mw. But the annual energy loss would be 60,000 MUs valuing Rs 12,000 crore. Compared to the total cost of individual project like Uri-I, Rs 3000 crore, Salal, Rs 1,000 crore and Dul Hasti, Rs 5,000 crore, it is a huge loss. Even if these projects are handed over to the state, they said, it would not compensate the loss inflicted by the 1960 treaty.
Still, the situation is not that bleak. In 1998, the government had assessed the potential of Chinab and Indus rivers as 10,000 mw on the basis of run of the river schemes with small storage capacity in their tributaries limited to maximum storage capacity permissible under the Indus Water Treaty. If the state government is allowed to go for tapping the potential on its own, it would change the whole power scenario here.
Sadly, however, the government of India has scuttled all such moves in the past by refusing to provide counter-guarantee when the state government tried to sign MoUs with foreign consortiums forcing it to hand over seven projects to NHPC in 2000.
Presently, the NHPC generates 2175 mw from different projects in India out of which Jammu and Kashmir alone contributes 1170 mw i.e. 54 per cent of the total installed capacity.
Based on the reported completion cost of Rs 1,000 crore on both stages of the 690 mw Salal Hydro Electric Power project, a standard debt equity ratio of 70: 30, discounting factor of 10 per cent and return of equity of 16 per cent, the NHPC till 2004 would have recovered about Rs 600 crore and ROE alone at present value would be equivalent to about Rs 354 crore against their total investment of Rs 300 crore. This would be in addition to the NHPC having paid off the entire debt of Rs 700 crore along with the accrued interest till its repayment.
The state government had pleaded that 690 mw Salal Hydro Electric Project has paid back more than its debt and equity investment of NHPC, the project needed to be transferred to the state. But nothing has happened on the count.
Officials say the state government had asked the government of India it to make Jammu and Kashmir fully participatory for sharing of the power generated on the three eastern rivers as compensation to the Indus Water Treaty. It had pleaded that the water was being stored on these rivers at the cost of Jammu and Kashmir and consequently the state should get the share in power generation on these. However, the state government never pleaded the case vigorously.
The state government has been so indifferent that Bhakta Beas Management Board has withdrawn its meager share of 25 mw to 30 mw to Jammu and Kashmir about two decades ago forcing it to purchase the same at a much higher cost. The cost of power was 5-paise per unit. Sources said the state government never took up the issue with the BBMB thus allowing the continuous loss to the state.
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