New Delhi: The power ministry is making renewed efforts to revive an 18-year-old 330MW hydropower project on the Jhelum, egged on by the progress made by Pakistan on a competing 969MW downstream project.
The Jhelum orginates in India and flows into Pakistan, and according to the Indus Water Treaty of 1960, whoever builds the project first will have the first rights on the river water. In May, the Pakistan government decided to award the contract to a Chinese consortium.
“This project is of strategic importance to India. We will shortly take the revised cost estimates of Rs3,700 crore ($928 million) for the project for the cabinet’s approval. We have to move heaven and earth to ensure the earliest commissioning of the project. Prime Minister Manmohan Singh is aware of the development and shares the ministry’s view,” said minister of state for power Jairam Ramesh on Monday.
His ministry will be seeking fresh approval for the Kishanganga project, which is estimated to cost 68% more at Rs3,700 crore and will be built by NHPC Ltd.
The increase in estimates is due to the higher risk associated with the project due to difficult geology and its proximity to the border with Pakistan.
Though 12 of its projects have been delayed due to shortage of manpower and price disputes with private contractors, the government is looking at NHPC to deliver, and an NHPC executive who did not wish to be identified said, “We welcome the government’s efforts to help us chart a new course.”
“It is a good move on the part of the government but let us see how it pans out. Moves like these will help the delayed projects of NHPC. Apart from being situated near the Indo-Pak border, this particular project has a heavy silt load,” said K. Ramanathan, distinguished fellow at the New-Delhi-based The Energy and Research Institute.
The state-owned company is also hoping that its initial public offering or IPO, will be cleared soon so that it can tap the capital markets by August this year. “The IPO will be critical to NHPC’s success. Of seven independent directors required, four are in place and three will be shortly appointed. The company has already applied for the mini-ratna status and will shortly be awarded one,” the minister said.