Thursday, January 22, 2009

Govt rushed through Chenab Corpn

Guv Nominated Chairman; Plea For More Royalty Shot Down
Srinagar, Jan 21: During Governor’s rule, consent has been given for the formation of the Chenab Valley Power Development Corporation to exploit the waters of Chenab basin and the Governor made the ex-officio chairman of the company. Sources said on October 10, 2008 a joint venture between the NHPC and the JK Power Development Corporation was signed and on 28 November, when the code of conduct was in vogue, the government order was issued and the Governor was made as an ex-officio chairman of the joint venture company.
Sources said there was no exigency to get the draft MoU approved and to nominate the Governor as the chairman. “Power in Jammu and Kashmir is a sensitive issue and there was no need to rush through the approval of MoU when the elected government was only a month away,” said an official.
The commissioner secretary Power, Sandip Naik, refused to comment on the issue. He said it was an issue of power generation and only MD JKPDC could comment.
The MD JKPDC, Shant Manu, said that MoU was finalized when Baglihar project was commissioned. During the Governor’s rule the draft MoU of the CVPDC was finalized and approved at a state advisory committee meeting. Apart from the governor, the company would have four directors- chief secretary, finance secretary, planning secretary and power secretary.
The MD JKPDC said that in Governor’s rule the chairman of the joint venture company was the Governor and now when the elected government has come to power, the chief minister would be its chairman. However, he said, formal orders have not been issued in this regard.
In May 2008, the state Government had taken “a decision in New Delhi in consultation with the union power ministry, to float the CVPDC” to exploit the water resources of Chenab basin.
In the first instance three power projects would be developed. The decision to float the corporation was taken in a meeting attended by Union Minister of State for Power, Jairam Ramesh, J&K Power minister, Babu Singh, who was accompanied by the commissioner secretary Power Sandeep Naik and resident commissioner, S V Bhave.
The meeting had reportedly agreed that the Jammu and Kashmir state and NHPC would have the equity share in respect of three major power projects coming up on Chenab and a draft MoU will be forwarded to the state for its cabinet approval in next couple of weeks. But then the situation changed in Kashmir and Governor’s rule was imposed.
Sources said according to the draft MoU, the three projects to be taken up are Pakal Dul, Kiru and Kwar.
The Pakal Dul project is of 1000 MW capacity located on river Marusudar in Doda district. The estimated cost of the project is Rs 5511.83 crore and its construction period is six years.
The Kiru project of 600 MW is planned at 25 kms upstream of Dulhasti project as run of the river scheme on river Chenab and is located in Kishtwar. The projected is estimated to cost Rs 2381.92 crores and its construction period is five years.
The Kwar project is planned across river Chenab as a run of river scheme near Padyarna village in Kishtwar district. The installed capacity of the project is proposed as 520 MW and its estimated cost is Rs 3386.11 crores and its construction period is five years.
In the joint venture company the NHPC would have the share of “not less than 51 percent and Jammu Kashmir State Power Development Corporation shall have the share of not more than 49 percent of the total share holding in the company.”
However the experts said that by incorporating “not more than 49 per cent” for JKSPDC, the Government of Jammu Kashmir has been given an excuse not to give its share. “It could be anything between zero to 49 percent,” the experts said adding that the MoU should include “not less than 49 percent” for JKSPDC as well so that the state government should not be given an excuse to ask NHPC to fill its shares as well in times of financial crises. “Not less than 49 percent provision would bind the government to fulfill its share”, they said.
The JKSPDC and NHPC would have the right to purchase share holding of the other partner in the joint venture.
The benefits of the joint venture shall be shared by the respective parties in proportion of their actual contribution in share holding of the corporation and the company would be reportedly under an obligation to provide 12 percent of power generated from the projects free of cost to Jammu and Kashmir.
However, the experts said that why the State Government should always stop at 12 percent royalty. They said once the debt repayment was over the royalty should exceed to 30 percent and at later stage to 50 percent. “Here royalty is sealed at 12 percent and it is against the established norms,” they said. Sources said there were major players other than NHPC who had asked the State Government that it would give up to 20 percent royalty but their proposal were shot down.
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