In a significant decision, the State Administrative Council (SAC), which met here today under the chairmanship of Governor, Shri Satya Pal Malik accorded sanction to the formation of a separate Joint Venture Company, having Government of India (Central PSU) and Government of J&K (J&KSPDC) as the two partners owning defined shares in the Company, for the object of development of the 850 MW Ratle Hydro Electric Project (HEP) and its transfer to the State of J&K within a period of seven (07) years from the start of commercial operation of the project.
SAC further accorded sanction to the submission of 05 Models of Joint Ventures based on ownership proportion with 15-25% free power (including Local Area Development Fund) to the Ministry of Power, Government of India for the purpose of arriving at the best suitable Joint Venture Model.
The analysis of the models has revealed that all of these will be favorable to Jammu and Kashmir with majority ownership remaining with State (ranging from 51% to 90% State ownership).
The hydro power projects, with long gestation periods, coupled with relief & rehabilitation issues and higher initial capital investment, have not remained attractive investment portfolios for private investors.
Secondly, most of the major civil construction agencies in the country are presently facing financial stress and tend to avoid such investments. To minimize risk in investments, construction agencies feel more comfortable to work as contractors and not owners in development of hydro power.
In view of the strategic importance of accelerating development of hydro power projects on western rivers as per provisions of the Indus Waters Treaty, the Government of Jammu and Kashmir proposed development of the project in joint venture mode between Jammu and Kashmir State Power Development Corporation (JKSPDC) and Central PSUs. An earlier Joint Venture was established for PakalDul, Kiru&Kwar HEPs (CVPP ltd).
The Project shall cater to the energy requirements of the State in particular and the country as whole, in addition to providing gainful employment and bringing developmental activities in the project area.
The 850 MW Ratle HEP has been conceived as a run of the river project, located on River Chenab near Drabshalla village in Kishtwar District and lies in between Dulhasti HEP on its upstream and Baglihar HEP on its downstream.
Among the bigger upcoming projects in Chenab valley, this project is considered as the most conveniently located and most amenable to expeditious development.
It can be completed in about 5 years and would benefit the State a lot.
The last attempt at promoting it as a PPP project with a 35-year concession period failed. The Joint Venture is the best route now to realize the potential of the Ratle HEP.