New Delhi: The Union Cabinet on Wednesday approved a ₹5281.94 crore investment for 850 megawatt (MW) Ratle hydropower project on Chenab river in Jammu and Kashmir.
This comes in the backdrop of India’ plan to expedite strategically important hydropower projects in the union territory post its reorganization, as the National Democratic Alliance government plans to fully utilize its share of water under the Indus Waters Treaty of 1960. Chenab flows from India into Pakistan.
According to a government statement, the Ratle project located in Kishtwar district will be developed by a new joint venture co many between state run NHPC Ltd and Jammu & Kashmir State Power Development Corporation Ltd (JKSPDC). While NHPC will have a 51% stake in the JV firm, the balance will be held by JKSPDC.
Mint earlier reported about India looking to speed up state run NHPC Ltd’s hydropower projects in Jammu and Kashmir following reorganization of the state that has been hit by an unprecedented cycle of violence in recent years. The task is seen as strategically vital in the context of China developing the controversial China-Pakistan Economic Corridor (CPEC), part of its showpiece One Belt One Road (OBOR) infrastructure initiative.
According to the Indus Waters Treaty, whoever builds the project first will have the first rights on the river waters. India and Pakistan signed the treaty in 1960 after nine years of negotiations, with the World Bank being a signatory. The treaty sets out a mechanism for cooperation and information exchange between the two countries regarding their use of rivers.
“Government of India is also supporting the Union Territory of Jammu and Kashmir by providing grant of Rs. 776.44 crore for equity contribution of JKSPDC in the JVC to be set up for construction of Ratle HE Project (850 MW). NHPC shall invest its equity Rs.808.14 crore from its internal resources. The Ratle Hydro Electric Project shall be commissioned within a span of 60 months,” the government statement said.
Apart from raising objections on the 330MW project on the river Kishanganga, a tributary of Jhelum, Pakistan had also raised objections on the 1,000 MW Pakal Dul and 48 MW Lower Kalnai hydroelectric projects on River Chenab. After the International Court of Arbitration at The Hague ruled in India’s favour in 2013 on the Kishanganga project, India expedited its construction with Prime Minister Narendra Modi in May 2018 dedicating the NHPC Ltd’s hydropower project to the nation.
“Government of Union Territory of Jammu and Kashmir, to make the Project viable, will extend exemption from levy of Water Usage Charges for 10 years after commissioning of the project, reimbursement of State's share of GST (i.e. SGST) and waiver of free power to the Union Territory of Jammu and Kashmir in a decremental manner,” the statement said.
NHPC has paid around Rs5387.51 crore to J&K towards water usage charges. In addition to supplying 789 MW to the J&K from its power projects, NHPC also gives 12% free power amounting to J&K and 1% free power towards local area development fund.
"Union Territory of Jammu and Kashmir will be benefitted by getting free power worth Rs. 5289 crore and through levy of Water Usage Charges worth Rs.9581 crore from Ratle Hydro Electric Project, during project life cycle of 40 years,” the statement added.
NHPC’s projects have been under the terror threat. NHPC has invested around Rs20,778 crore there over the past four decades. NHPC Ltd is the main supplier of electricity to J&K and the largest investor there.
NHPC plans to develop projects totaling 3,814 MW on its own and through joint ventures in the union territory. Apart from Ratle, these projects include; 800 MW Bursar project. Also, NHPC is implementing the Pakal Dul (1000 MW), Kiru (624 MW) and Kwar (540 MW) hydropower projects in the J&K in a joint venture—Chenab Valley Power Projects Pvt. Ltd—with JKSPDC and the country’s largest electricity trader, PTC India Ltd.
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