Cabinet approves Rs 5,282 cr to revive J&K hydro project

By: |
January 21, 2021 2:20 AM

The Centre will provide a grant of Rs 776.44 crore to JKSPDCL for its equity contribution in the venture. NHPC will invest its Rs 808.14-crore equity from its internal resources. Secunderabad-based GVK Industries was earlier awarded the project development contract for the Ratle hydro plant and JKSPDCL had signed a power purchase agreement (PPA) with the company in June, 2010.

The Cabinet, on Wednesday, also approved the signing of memorandum of understanding between India and Uzbekistan for cooperation in the field of solar energy.

The Cabinet on Wednesday approved an investment of Rs 5,282 crore in building the 850 mega watt (MW) Ratle hydro-electric project on the Chenab river in Jammu and Kashmir, signalling the Centre’s renewed efforts to boost investments in the militancy-infested valley. The project will be jointly developed by the National Hydroelectric Power Corporation (NHPC) and Jammu and Kashmir State Power Development Corporation (JKSPDCL), with equity contributions of 51% and 49%, respectively.

The Centre will provide a grant of Rs 776.44 crore to JKSPDCL for its equity contribution in the venture. NHPC will invest its Rs 808.14-crore equity from its internal resources. Secunderabad-based GVK Industries was earlier awarded the project development contract for the Ratle hydro plant and JKSPDCL had signed a power purchase agreement (PPA) with the company in June, 2010. Former Prime Minister Manmohan Singh and UPA chairperson Sonia Gandhi had laid the foundation stone for the Ratle project in 2013.

However, construction work was suspended at the project site due to frequent local disturbances since July, 2014 and the Jammu and Kashmir government had terminated the PPA in February 2017. Out of the 1,024 metres of tunnel excavations needed for the project, 490 metres have already been dug out.

To make the project viable, Jammu and Kashmir will exempt it from paying water usage charges for 10 years after commissioning. The Union territory will also partly forego the 12% free power that host states of hydro power plants normally receive. Jammu and Kashmir will get 1% free power in the first year, gradually rising to receive 12% free power in the twelfth year.

The Centre expects Jammu and Kashmir to get free power worth Rs 5,289 crore and water usage charges worth Rs 9,581 crore from the hydro project during its project life cycle of 40 years. The Cabinet, on Wednesday, also approved the signing of memorandum of understanding between India and Uzbekistan for cooperation in the field of solar energy.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1GST evasion: CBIC asks field offices to exercise max caution, prudence in property attachment
2Consumer Friendly: Fresh spectrum purchase to further delay tariff hike
3India-UK Trade Deal soon? Talks on track, says UK High Commissioner