By Maumil Mehraj and Maknoon Wani
THE Union Cabinet, chaired by Prime Minister Narendra Modi, cleared the 850 MW Ratle Hydro Electric Project on the 20th of January. The government approved an investment of INR 5281.94 crore for the project to be commissioned within 60 months.
The project located on the river Chenab in Kishtwar district of the Union Territory of Jammu and Kashmir, will be undertaken jointly by the center-owned National Hydroelectric Power Corporation (NHPC) and Jammu & Kashmir State Power Development Corporation Ltd (JKSPDC) with an equity contribution of 51% and 49% respectively.
“The construction activities of the Project will result in direct and indirect employment to around 4000 persons and will contribute in the overall socio-economic development of the Union Territory of Jammu and Kashmir,” read a statement released by the Union Cabinet. While the claims will, in all likeliness, remain true for the construction period of the project, will a sustained employability be assured is a question that remains.
How will it benefit the region?
The statement also said that Jammu and Kashmir would get free power worth INR 5289 crore and INR 9581 crore Water Usage Charges during the project’s 40-year life cycle. However, the power-starved region is unlikely to benefit from the project immediately after it is commissioned. According to the implementation strategy, the union territory government will exempt the project from Water Usage Charges for a period of 10 years.
Moreover, the statement also says that the UT of Jammu and Kashmir will waive free power and its share of the GST. “…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, i.e., the free power to the Union Territory of Jammu and Kashmir would be 1% in the 1st year after commissioning of the Project, and rising @1% per year to 12% in the 12th year.”
According to this arrangement, the union territory will reach a threshold of 12% (of the total power generation) in the 12th year of the commissioning of the project. This 12% royalty will be paid for the remaining 28 years of the project’s life cycle.
What is J&K’s hydropower potential?
Jammu and Kashmir has the potential to produce 16,475 MW of hydropower as per an assessment made by the Central Electricity Authority (CEA). A total of 3,210 MW is already being harnessed in the region. Out of this, JKSPDC harnesses 1211.96 MW from its 21 power projects, and NHPC produces the remaining 2,009 MW from seven projects.
Is Ratle a run-of-the-river power project?
Ratle is reportedly a run-of-the-river hydroelectric project which is different from a conventional power plant. Such projects do not require a large reservoir (dam) to move the turbines to generate electricity. Large reservoirs often lead to flooding and loss of habitat for both wildlife and humans. Run-of-the-river power projects have a relatively lesser impact on the local biodiversity because they do not lead to flooding. However, the power supply can often be seasonal because the water is not stored in a large dam. Such power projects use the flow of the river and natural terrain to achieve the water pressure required to generate electricity. According to the NHPC, Ratle will operate with a 133 meter high concrete dam, which is only 30 meters less than Gujarat’s Sardar Sarovar Dam, the third highest concrete dam in India. However, on speaking with a senior official from the project, it was explained to us that the above mentioned dam was more for the purpose of “stoppage” rather than “storage”. What this entails is that the water will only be stopped for no more than a few hours and then directed further through pressure shafts, thereby doing away with higher environmental hazards like flooding and an increased disturbance to the ecology of the area.
Will this project alleviate J&K’s power crisis?
Every winter, when the demand is higher than usual, Jammu and Kashmir witnesses acute power shortage because of supply shortfall and poor transmission infrastructure. It is understandable that hydroelectric power generating capacity gets massively decreased in the winter months, and the subsequent demand of electricity gets increased in every household, but the question of performance on part of the administration stays. NHPC, a public limited company, has often been accused of depriving the region of its water resources. The royalty rate paid by the corporation towards the union territory has remained at a paltry 12%. In the past, the local legislators have called for the transfer of power projects from the NHPC. While NHPC derives 40% of its total hydroelectricity production from the region, the J&K exchequer has to pay huge bills to meet its electricity needs. On books, J&K produces surplus electricity, but most of it is exported to other states, which leads to long hours of load shedding across the erstwhile state.
According to the Government of India’s Environmental Information System (ENVIS), J&K has a power demand of 17,323 million units, out of which the state sectors produce only 2,562 million units. There is a shortfall of 14,761 million units of electricity, which has to be bought from other sources, including the NHPC. According to the 18th Electric Power Survey of India report published by the Ministry of Power, GOI, J&K shall have a peak load of 4217 MWs in 2020-21 with an energy requirement of 21,884 million units. The production capacity of the project is 3136.76 million units and the waiver of free power for a period of ten years (at an incremental rate of just 1% per annum) means that Ratle Power Plant is unlikely to contribute much to the electricity needs of J&K.
The 2015-16 budget of J&K had anticipated that an investment of INR 60,000 crore would be required in the state sector and joint venture projects alone. Ratle Hydro Electric Project — a joint venture project — will add INR 14,870 crore to the UT’s exchequer but over a long period of 40 years. The Government of India has pledged INR 776.44 crore for the equity contribution of JKSPDC, while NHPC will invest INR 808.14 crore towards the project. This investment seems very insignificant since the electricity demand of the region is increasing every year. It remains to be seen whether the government will start new projects in the near future and give a larger share of electricity to the regional corporation which can directly benefit the people of J&K.
All these observations, coupled with the insight provided by our sources, it becomes amply clear that this project is not in fact as all-encompassing as citizens are made to believe. By multiple standards, the Ratle Hydroelectric Power Project is a small project. Even when it comes to the Chenab River, it is one of the simplest projects in terms of construction, and does not in fact violate the Indus Water Treaty as there is no storage of water involved.
Views expressed are authors own and do not necessarily represent the editorial stance of Kashmir Observer
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