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New Delhi: The National Democratic Alliance (NDA) government is hopeful of expediting strategically important hydropower projects in Jammu and Kashmir post the scrapping of Article 370 of the Constitution that grants special status to the terror prone state.

This comes in the backdrop of the government stepping up efforts to develop the infrastructure architecture for the state which has witnessed an unprecedented cycle of violence in recent years; event as China is developing the controversial China-Pakistan Economic Corridor (CPEC), part of its showpiece “One Belt One Road" (OBOR) infrastructure initiative. According to the Indus Water Treaty, whoever builds the project first will have the first rights on the river water.

In addition, state run NHPC Ltd that has been supplying electricity to the state despite unpaid dues of 1512 crore is also confident of an early settlement of its bills. Out of a total 4438.47 crore owed to publicly listed NHPC, Jammu and Kashmir State Power Development Corp. Ltd (JKSPDC) alone accounts for more than a third or 1512.19 crore. Of these 1091 crore has been due to India’s largest hydropower generation utility way past 45 days.

As part of the Union government’s attempt to improve its relations with Jammu and Kashmir, NHPC continues to supply electricity to it, even as the law allows the utilities to regulate or discontinue power supply if dues haven’t been paid.

NHPC’s projects have been under the terror threat. NHPC has invested around 20,778 crore there over the past four decades. Apart from being the largest investor in the state, NHPC has also paid 5387.51 crore to the state towards water usage charges. In addition to supplying 789 MW to the state from its power projects, NHPC also gives 12% free power amounting for Rs4392.84 crore (till December 2018) to the state and 1% free power towards local area development fund.

According to information reviewed by Mint, NHPC plans to develop projects totaling 3814 MW in the state on its own and through joint ventures (JVs) with the state government. These projects include; 800 MW Bursar project, and the 850 MW Ratle project that is to be set up under a joint venture route between the state run firm and the J&K government involving an investment of around 6215.61 crore. Also, NHPC is implementing the Pakal Dul (1000 MW), Kiru (624 MW) and Kwar (540 MW) hydropower projects in the state in a joint venture---Chenab Valley Power Projects Pvt. Ltd--- with JKSPDC and the country’s largest electricity trader, PTC India Ltd.

“The dues are pending for a very long time. However, given the sensitivities involved, NHPC continues to supply electricity to J&K," said a senior union government official requesting anonymity.

With J&K defaulting on payments since April 2012, NHPC has also been seeking power ministry’s intervention to facilitate recovery of unpaid dues. There have also been many a times when NHPC withdrew its notice of regulation to suspend electricity supply to the state over unpaid dues.

While Jammu and Kashmir State Power Development Corp. Ltd (JKSPDC) officials couldn’t be contacted, a NHPC spokesperson didn’t respond to Mint’s queries on Monday. Queries emailed to the union power ministry spokesperson weren’t immediately answered.

As part of the union government’s playbook in the state, Prime Minister Narendra Modi in May 2018 dedicated the NHPC Ltd’s Kishanganga hydro power project to the nation. The 330 MW project on the river Kishanganga, a tributary of Jhelum has significant strategic importance. While Pakistan had challenged the project under the Indus Waters Treaty of 1960, the International Court of Arbitration at The Hague ruled in India’s favour in 2013.

The Jhelum originates in India and flows into Pakistan. India has also been critical of China developing the CPEC, cutting through Gilgit and Baltistan areas of Pakistan-occupied Kashmir (PoK). OBOR, first unveiled by Chinese president Xi Jinping in 2013, aims to put billions of dollars in infrastructure projects, including railways, ports and power grids across Asia, Africa and Europe.

The marquee infrastructure projects in Jammu and Kashmir include developing roads totaling 683.31 km in length, with an investment of Rs10,204.45 crore, constructing the marquee 14-km-long Zojila tunnel and the 6.5-km Z-Morh tunnel on Srinagar-Kargil road.

The Rajya Sabha on Monday approved the scrapping of the special status enjoyed by Jammu and Kashmir by passing the Jammu and Kashmir Reorganisation Bill that seeks to scrap Article 370 and Article 35A in Jammu and Kashmir. The Lok Sabha is to take the bill up today. Once the lower house passes the bill, it will pave the way for bifurcation of the state into two Union territories – Jammu and Kashmir, which will have a legislature, and Ladakh, which will be without a legislature.

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