No Hydro electric project ‘gifted’ to NHPC: Govt

An official spokesman today strongly refuted a report published in an local English Daily claiming that the State Government ‘gifted’ 7 hydro- electric projects to NHPC and the MOU signed with the Corporation for harnessing hydro- electric potential is ‘detrimental to the interests of the state’.
Reacting to the report, the spokesman said that neither any project has been ‘gifted’ to the Centre nor MOU is ‘detrimental’ to the interests of the State. He said, on the contrary, the MOU signed between the J&K Government, State Power Development Corporation, NHPC and Power Trading Corporation (PTC) for tapping State’s hydro electric resources in joint venture is most beneficial to the interests of the State and its people. In fact, it is much better than similar agreements executed by NHPC with other States.
Contesting the claims made in the report, the spokesman said the MOU signed with the NHPC on Oct 10, 2008 pertains to only 3 projects for execution by Joint Venture Company (JVC) and not seven as mentioned in the report. The projects slated to be taken up in Joint Venture are Pakal Dul, Kiru and Kawar. In fact, the State cabinet has approved the draft MOU for these 3 projects to be executed by JVC in April 2008. It envisaged ownership of J&K State Power Development Corporation in joint venture company (JVC) to the extent of 49%. The MOU signed on 10th October this year also provides for 49% equity ownership in the JVC, each by State PDC and NHPC and remaining 2% with Power Trading Corporation.
The MOU envisages availability of 13% power free of cost to State Government including 1% meant for local area development Out of the balance power, the State Government has the right to purchase 49% power from the JVC at price determined by Regulator. The balance power will also be available to PDD at market price as first right of refusal resting with PDD. Thus almost 100% power from the three projects covered under the latest MoU is available to J&K State.
It provides that 80% of Group C & D staff in JVC shall be Permanent Residents of J&K State. Further, a minimum of 49% of Group A & B staff (senior managers) in the JVC shall be Permanent Residents of J&K State.
The MOU also provides that revenue receipts on account of sale of timber, royalty on river bed materials etc. arising as a result of the submergence of areas by the Projects shall accrue to the State Government.
Under this MOU, the rights in fisheries, navigation, exploitation of tourism potential etc. in respect of the ponds created by the Projects shall vest with the State Government.
The State Government will have the right to develop/allot other schemes in the upstream and downstream.
The Chairman of the Board of JVC shall be appointed by the State Government. The posts of Managing Director (MD) and Joint Managing Director (JtMD) shall be held by the nominees of NHPC and JKSPDC respectively. The Board of JVC will have equal representation from NHPC and JKSPDC.
The MOU envisages that Ministry of Power, Government of India will facilitate the financial closure of the Projects.
It provides that the Projects will be developed on Build, Own, Operate and Maintain (BOOM) basis by JVC.  
The spokesman said that similar arrangements made by NHPC with other State Governments actually provide that all staff to be taken on deputation with ceiling of 30% of staff in executive cadre and majority share with NHPC that is not less than 51% of equity, 12 % free power, 49% of balance power to the State concerned and balance power belonging to the Central Government for allocation. There is no first right of refusal as in the case of Jammu and Kashmir.
The spokesman recalled that one MOU with NHPC was signed on 20 July 2000 whereunder seven projects, namely, Kishenganga, Uri-II, Bursar, Sewa-II, Pakal Dul, Nimmo Bazgo and Chutak had been transferred for execution in Central Sector through NHPC in phases for helping J&K State in its overall development besides meeting its winter peak requirements of electricity. Out of these seven, four projects, namely, Uri-II, Sewa-II, Nimmo Bazgo and Chutak are at an advanced stage of execution. This MoU also envisaged implementation of power sector reforms and privatization of distribution of power in Srinagar and Jammu.
The spokesman said that the MOU arrangement of JKSPDC with NHPC and with PTC needs to be seen in the context of resource and project management constraints to develop the big power projects.