Bad power deal leaves J&K in the dark


Jammu & Kashmir gets only a fraction of the electricity generated within the state. This is a huge source of angst in the Valley. Baba Umar on why this injustice continues

Smoked out The Khans of Andervan still study by lachi firelight
Smoked out The Khans of Andervan still study by lachi firelight
Photo: Abid Bhat

IF THERE is one thing I want to see in my life, it is electricity,” says 35-year-old Hafiz Khan as he smokes traditional Kashmiri hubble-bubble in the smoke-filled kitchen.

Every night, in his two-room mud-and brick house, Khan’s family of seven eats by the light of a kerosene lantern carefully set low so that the flame lasts for seven minutes. This is all the time the tribal family gets to finish dinner. His son Shahid Ali Khan, a Class 10 student, uses the centuries- old technique of burning carefully selected dried roots of deodar or pine trees locally called lachi. And a small gap in the timber ceiling is the only escape for the smoke once it has blackened the insides of their lungs and kitchen.

Andervan, a tiny village of about 50 Gujjar families nestled amid the lush Kachwaan mountains and Akingam hillock, not far from south Kashmir’s famous tourist spot Achabal, is just another heart of Kashmir’s darkness. This village hasn’t seen electricity despite 64 years of Indian independence. Children are taught to study and play in the dark. Women, lanterns in hand, carry headloads of water over long distances through maize fields despite danger of monkey and bear attacks. In 2008, Andervan — which falls in the constituency of Education Minister Peerzada Mohammad Syed — had exploded in joy. Electrifying the village was a key promise during election rallies. But to this day, students continue to imperil their eyesight with firewood smoke.

It’s not only Andervan: lack of power and erratic supply have been a constant cause of simmering discontent among people across the state. In fact, during the 2010 unrest, one of the unlikely grievances mentioned by stone-throwing youth was ‘theft’ of power by Government of India enterprise National Hydroelectric Power Corporation (NHPC). That’s because it shares only 12 percent of the total power generated from the roar of J&K’s rivers with the state and sells the rest to the wider Northern Grid for other states. At peak hours, according to government officials, NHPC sells the same power to the state at exorbitant rates of Rs 8-12 per unit while spending only around Rs 60 paise to generate a power unit.

Power is increasingly becoming the second big issue in Kashmir after the decades-old conflict. Despite capacity of producing over 20,000 MW of power, only 2,456 MW have been harnessed so far, mostly by the NHPC, which is currently working on 14 more power projects with a total capacity of 3,445 MW.

Of late, ear-splitting voices have been raised over the issue of power in an energy deficit state whose power ambitions started in the 1970s but faced two hurdles. One was the controversial deal with NHPC — a corporation that a senior Congress leader equates with the East India Company, “sucking all electricity” generated on J&K’s waters. And the 1960 Indus Water Treaty (IWT) between India and Pakistan over sharing the water originating from J&K which is seen as ‘discriminatory’ towards the state. This treaty prohibits the state from damming rivers flowing down to Pakistan, which could have been otherwise used to generate thousands of megawatts.

The mystery over why NHPC shares only 12 percent of power generated in J&K to the energy-starved state and not more than that was recently unearthed by the powerful Congress leader and the state’s Minister for Public Health Engineering, Irrigation and Flood Control, Taj Mohiuddin when he got J&K Water Resources (Regulation and Management) Bill 2010 passed in the Assembly. The legislation requires the power-generating companies (state, Centre or private consortium owned) to pay for the water used for generating electricity.

“When NHPC applied for registering their projects and licence to use water, I stumbled on their application that said the corporation has ownership rights on all hydroelectric power projects, especially the Salal project. This was a shocker. How could they own these projects, that too without any agreement about holding of land on lease basis?” Mohiuddin told TEHELKA.

The minister soon set to digging up the history of the 690 MW Salal project on Chenab river in Jammu region. According to Cabinet decision 537 taken on 15 December 1980, a copy of which is with TEHELKA, the state Cabinet had conveyed to the Centre that in the Salal project, J&K will have a 50 percent share of the power generation and half of the profits it makes. Both sides will review the power requirements of J&K after every five years. The project was supposed to be returned to the state government after the depreciation period against a payment of 10 percent of the project cost in accordance with the J&K Electricity Supply Act, 1971.

Before that, the conditions of the engagement (as per Cabinet decision No. 128) were conveyed to the Union power ministry vide letter No PD-IV/243/72 on 21 July 1975, following which the work on the project started.

BUT NHPC in its communication to the PHE department (NH/SPS/GMO/DB- 6/2011/2486-88 on 7 June this year) categorically denied having ever entered into any such agreement by stating, “The corporation is executing the power projects in Jammu and Kashmir under Indian sovereignty and that the Union of India was enjoying sovereign power over the land and waters of J&K. In view of the above, the ownership of Salal lies with NHPC.”

Fuse box The Salal project
The Salal project
Photo: Bilal Bhadur

“The project got fully depreciated in 2003 but was not handed over. The power share of 50 percent was never respected. Same is the case with Dulhasti, Uri and other power projects too. This is the main reason why the state reels in the dark despite abundant resources to generate power,” says Mohiuddin, adding, “My remark that the NHPC is like the East India Company in Kashmir whose 55 percent of the total revenue comes from the J&K state only isn’t wrong.”

According to existing laws, only permanent residents of the state can hold land titles — others can only take a lease. NHPC, according to Mohiuddin, has failed to produce any document that could justify its occupation of land for Salal (almost 624.42 acres) and other projects. “There is no order regarding the land lease and for how much time NHPC will be allowed to keep the thousands of kanals (1 kanal=5,440 sq ft) under its possession,” the minister says.

This has triggered fears that misplacement of records means losses suffered by J&K are more than Rs 10,000 crore — the value of energy generated by the Salal project every year for the past three decades.

Stung by the revelations, the Chief Minister Omar Abdullah soon nominated a Cabinet sub-committee comprising several ministers who are studying the issue of transferring all power projects from NHPC. This includes the 690 MW Salal, 390 MW Dul Hasti, 480 MWUri-I and 120 MWSewa, 45 MW Chutak and 44 MW Nimo Bazgo.


2556 MW The fraction of its 20,000 MW capacity that the state utilises

88% The percentage share of power that the NHPC sells outside the state

50% The amount of power the state should have got according to a 1975 Cabinet decision

425 The number of small power plants started by the army but lying defunct

624.24 acres The area of land under the NHPC for which the state has no records

1,700 cr Or 60 percent, the amount of transmission and distribution losses in the state


Another twist in the story occurred when the state’s Power Development Department (PDD) found in the archives a draft Memorandum of Understanding (MoU) of 1984 that contradicts the Cabinet order of 1975 on execution, energy sharing and transfer of Salal power project. This was the same period when the Farooq Abdullah-led National Conference government had been toppled by his uncle GM Shah with the support of the Congress. Many don’t rule out foul play by the Shah government.

“Even according to the draft agreement, NHPC has to give the state a share of 35 percent of the power it generates every year, besides 12 percent royalty. NHPC stands in contravention to that understanding too,” says noted Kashmir industrialist Shakeel Qalander, who has been spearheading a civil society group that seeks transfer of all power projects from NHPC to the state.

Fuse box The Baglihar project
The Baglihar project
Photo: Shailendra Pandey

The debate has now taken a new dimension. The civil society members are contemplating whether the then government literally yielded before New Delhi and altered its decisions in 1984 and whether the Rs 19,000 crore power generation plan under the Prime Minister’s Economic Reconstruction Programme meant for J&K has actually benefited NHPC.

Qalander, along with several members of civil society, recently moved a PIL in the Srinagar High Court seeking arbitration. The court has directed the petitioners to take up handing over of these projects with the state government and New Delhi and knock judicial doors in case there was no progress within two months.

Qalander seconds Mohiuddin’s assertions that NHPC has in no way generated local employment “as most of the workers have been drawn from outside J&K when NHPC, according to 1975 orders, is supposed to take 50 percent staff from the state.”

Despite repeated attempts, NHPC’s Executive Director (Region-I), Jetinder Singh didn’t respond to TEHELKA’s calls and emails.

The PM’s Economic Reconstruction Programme for J&K has benefited only NHPC, not the state

In October 2004, when former chief minister Mufti Mohammed Sayeed sought transfer of Salal from New Delhi, the Prime Minister’s Office sent the proposal to the Ministry of Power, it took time to study the idea and finally rejected it. The matter was sent to C Rangarajan, chairman of the Prime Minister’s Economic Advisory Council (PMEAC) too. The transfer, according to the Rangarajan report, would have meant a total gain of Rs 4,064 crore to energy- starved J&K but the power ministry’s arguments led the PMO to reject it. The Rangarajan Committee, however, had also made specific recommendations, including transfer of Dul Hasti hydel power project (390 MW) and Bursar storage scheme (1,020 MW) from NHPC to J&K state. But it was never realised.

The problem has been further aggravated by New Delhi’s refusal to aid the state to construct hydro power projects. In one instance, when the state government had secured funding from various international financial institutions to construct the 330 MW Kishenganga hydro project on the Jhelum/Neelum River at Gurez near the LoC, New Delhi didn’t give any counter guarantee to the companies, pushing the project to be handed over to NHPC. The royalty in this project too will be only 12 percent when the power generation starts.

The state owns 20-odd hydro-power projects, mostly small, with a cumulative capacity of 760 MW. In peak winter, two gas turbines with a combined capacity of 175 MW are operational. But since the capacity goes down by 30 percent in winter owing to low river discharge, rest of the power is purchased from NHPC.

Fuse box The Uri project
The Uri project
Photo: Bilal Bhadur

“Now this is a critical area,” says an official in the state’s power department. “If the state has money, it will fill the deficit but since J&K is always cash-strapped, it buys less and people have to face almost eight-hour power cuts in 24 hours. The cut varies in urban and rural areas — the urban people benefitting usually.”

Even the installation of more than 425 micro hydel projects constructed by the Army under Operation Sadbhavana hasn’t relieved the state of its power headache. Although the state, according to sources, had spent Rs 5.5 crore on army’s project, almost 80 percent of the projects were recently found non-existent or defunct.

In reply to a question in the Legislative Council in April, the Minister for Science and Technology Aga Syed Ruhullah admitted that a committee set up by the state government found 388 such projects non-functional and 37 non-existent.

OVER TRANSFER of NHPC power projects to the state, Chief Minister Omar Abdullah too doesn’t appear confident.

Recently, in an exclusive interview to TEHELKA, Abdullah said he understands the discomfort over the NHPC deals (I Could Have Done More to Reach Out, by Shoma Chaudhury, 6 August). “It is only right that the projects are transferred back to the state after a period,” he said. “They (NHPC) can’t own them forever.”

The CM, however, seemed to attribute power shortages in the state more to power thefts than the state’s inability to retrieve all the hydel projects from the NHPC. He said thefts incur losses of 1,700 crore to the state but forgot to admit that poor transmission and distribution (T&D) network has been causing losses of more than 60 percent of electricity before reaching its users.

Fuse box Crusading state minister Taj Mohiuddin, who got a crucial Bill passed in the Assembly
Crusading state minister Taj Mohiuddin, who got a crucial Bill passed in the Assembly

In fact, the opposition People’s Democratic Party (PDP) has been alleging for long that three generations of Abdullahs heading the National Conference have sold out the state’s hydro resources at “dirt-cheap rates” to NHPC. In a recent statement, PDP chief Mufti Mohammad Sayeed sought renegotiation of pacts with NHPC.

“Renegotiation of the discriminatory water agreement with NHPC is a definitive must for the economic development of the state,” he had said recently, while addressing the media.

Power has been central to the manifestoes of all political parties in the state and separatists continue to link the issue with India’s ‘hegemony’ over Kashmir’s resources.

However, many are looking forward to other power deals, like the one the state signed with GVK Development Projects Limited recently that pertains to procurement of power from 690 MW Rattle Hydro Electric Project (RHEP), to be constructed in Kishtwar district on Build, Own, Operate and Transfer (BOOT) basis.

RHEP will be reverted to the state on payment of a terminal value of 380 crore after a period of 35 years excluding seven years of construction and it will offer the state 16 percent free power including 1 percent as local area development fund, besides supplying 55 percent of the balance power to the state at tariff.

There is no deadline over when the government will get back its power projects from NHPC and if the Indus Water Treaty — that safeguards interests of downstream population and not upstream population — will be reviewed to benefit the state. Until then, villagers of Andervan will have to continue their evening and night chores under the light of lachi.

Baba Umar is a Correspondent with Tehelka.


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