STATE TIMES NEWS
SRINAGAR: With a view to providing fillip to the developmental activities across the State, the State Administrative Council (SAC) which met here on Wednesday under the chairmanship of Governor, Satya Pal Malik approved an amount of Rs 8,000 crores for completing all languishing projects in the State. For this purpose, the SAC approved the establishment of a new infrastructure company, the Jammu and Kashmir Infrastructure Development Finance Corporation (JKIDFC). The JKIDFC has been authorized to raise a loan not exceeding Rs 8000 crores from various financial Institutions including State/ Nationalized Banks for completion of these unfunded, languishing projects.
Advisors to Governor, B.B Vyas, K Vijay Kumar and Khurshid Ahmad Ganai, Chief Secretary B.V.R Subrahmanyam and Principal Secretary to Governor, Umang Narula were present at the meeting.
A persistent difficulty encountered in the development process has been the large number of languishing and unfunded projects. These developmental projects which are at different stages of execution are either inadequately funded or have been left incomplete due to one or the other reason. Some of them have been languishing for over 5 years resulting not only in blocking of funds spent on them but also in cost escalation and time overruns. A tentative assessment by the State Planning, Development and Monitoring Department (PD&MD) indicated that incomplete projects worth over Rs 10000 crore were at various stages and that over Rs 6000 crore would be required to complete all of them in one go. The State Planning department has further analyzed that six departments namely PW(R&B), PHE/I&FC, School Education, Higher Education, Youth Services and Sports, Health and Medical Education and Tourism taken together accounted for nearly two thirds of the total unfunded burden; the projects in these 6 departments alone account for nearly Rs. 4000 crores.
SAC took note of the fact that the completion of these projects in a business as usual manner would take over a decade. Recognising the need of the citizens for essential infrastructure, it decided to approve a special scheme that would enable nearly Rs 8000 crores of developmental funds to be made available in one go, to be used not only for completion of unfunded/languishing infrastructural projects in the State but also for any other new infrastructure projects, which was a priority for the state.
In order to ensure proper and fool proof operationalization of the scheme and selection, authorization, monitoring and regulation of projects under it, the SAC also approved the constitution of a High-Powered Committee (HPC) comprising Administrative Secretaries of Finance, Planning, PWD and PHE besides the concerned Secretary of the department whose projects were being considered. It also directed that a stringent set of guidelines be put in place to ensure that only the deserving projects and those which are essential from public standpoint be funded under this scheme. The process would include the accord of Administrative approval and all relevant Technical sanctions before a project could be considered for sanction under the scheme besides strict adherence to a totally transparent and competitive, e-tendering process.
SAC further ordered that all projects would have to be completed strictly within the specified timelines and a pre-agreed penalty shall be imposed on the executing agency in case of any delay or slippage.
The new company, JKIDFC would be registered by Friday i.e September 7, 2018, and work on the unfinished/languishing projects would start immediately within a week.
The direction of the Governor is that funding on this scale for languishing projects such as bridges, roads, drinking water schemes and buildings has never happened before and therefore, all departments should implement works in a speedy, time bound manner to finish them, preferably by May, 2019.
Unbundling of PDD, operationalisation of Tradeco
The SAC accorded approval for operationalisation of the Jammu and Kashmir State Power Trading Company Limited (Tradeco) and issuance of SRO notification regarding PDD Transfer Scheme (Phase-I) Rules, 2018.
It is pertinent to mention that the Central Electricity Act of 2003, applicable to whole of India (except J&K) mandated promotion of competition and efficiency in the power sector by operating it as a prudent commercial enterprise. One of the key steps towards this goal was “unbundling” of the generation, transmission and distribution undertakings in the States into separate corporate entities and running these on sound business lines.
The J&K Electricity Act, 2010 was enacted to provide a frame work similar to the Central Electricity Act of 2003. Consequently, J&K SPDC was approved as a Nodal Agency to act on behalf of the Government of J&K for the unbundling exercise to be completed in 2012 itself.
In 2012, Cabinet accorded sanction to the unbundling of the Power Development department into four successor companies i.e (i) Jammu & Kashmir State Power Transmission Company Limited (Transco), (ii) Jammu and Kashmir State Power Trading Company Limited (Tradeco), (iii) Jammu Power Distribution Company Limited (Jammu Discom), and (iv) Kashmir Power Distribution Company Limited (Kashmir Discom).
Even though the successor companies have already been incorporated, the operationalization of these companies could not take place till date due to various reasons.
The operationalisation of Tradeco is proposed to be completed in two phases. The first phase is planned to be implemented immediately and would involve Tradeco carrying out functions/responsibilities related to power trading like purchase entire power requirement for JKPDD and perform activity of bulk supply of power, trading of surplus power, etc. The second phase will be initiated once other successor companies (Transco, Jammu Discom and Kashmir Discom) become operational.
For making the Tradeco functional, activities like winding up of the Commercial & Survey Wing of PDD, creation of office space for Tradeco, Staff transfer etc will be undertaken.
This initiative by the PDD is a first step towards unbundling of PDD and setting a roadmap for clearing the liabilities on account of outstanding power purchase bills. It will also reduce the cost of purchasing power by bringing in efficiency and taking advantage of discounts. The introduction of personnel with specialized skills in the power purchase sector will lead to optimization of the cost of supply of power and ensuring immediate financial and operational benefits to the Department.
The Administrative Secretary PDD will be the Chairman of Tradeco.
Separate JVC for 850 MW Ratle Power Project
In a significant decision, the SAC 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
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