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| J&K to forgo 12 percent free power from Pakal Dul | | Beggar plays king! | | Syed Junaid Hashmi
JAMMU, Oct 27: Jammu and Kashmir government has decided to give up 12 percent free power entitlement to the state from 1000 megawatt Pakal Dul hydroelectric project being installed in Kishtwar district of Jammu region.
According to top sources, state has decided to give up 12 percent entitlement of free power in the Pakal Dul project which is being executed by Joint Venture Corporation (JVC) signed on October 10, 2008 amongst NHPC, JKSPDC and PTC. The company is called 'Chenab Valley Power Projects Private Limited' (CVPPP). State decision to give up free power is intended at reducing cost of the project.
State had to take this step after certain observations were made by Union Finance Secretary during a PIB meeting held on May 8, 2013. He had said that debt equity ratio of 70:30 may be revised, as per the cost of equity amounting is comparatively high. He had asked the state government to consider ways to reduce land cost and incidence of taxes. He had further asked for re-examining escalation with reference to the estimate based on current price level.
Finance Secretary had asked State Government to make efforts to reduce completion period, proposed to be 6 years at present. Consequent to this development, state government vide letter no. PDD/IV/34/2008 dated 03-07-2013 intimated union power ministry that it was taking certain stringent measures for reduction of cost of project.
As part of these measures, state decided to forgo 12 percent free power entitlement to in case the entire amount of power is purchased by Jammu and Kashmir and the cost is reasonably brought down below the average purchase cost of Jammu and Kashmir Power Development Department (JKPDD) by implementing various measures. State also decided to introduce exemption of entry tax and WCT.
J&K also pledged to take up the issue with government of India for providing subordinate soft debt to the tune of Rs. 2500 crore. Based on Government of J&K letter and CVPPL letter, reformulated PIB material was prepared by NHPC. Union Ministry of Power vide letter dated 30-07-2013 circulated reformulated PIB material to concerned ministries/departments.
NHPC vide letter dated 29-08-2013 submitted reformulated cost estimate amounting to Rs. 8988.05 crore (03/13 PL) to CEA and requested CEA to vet the same. Ministry of Power vide letter dated 30-8-2013, requested CEA to examine and vet the reformulated PIB note as there is substantial change in the cost of Project vis-à-vis the earlier proposal.
Meanwhile, an amount of Rs. 77.55 crore was released by NHPC on 25-02-2013; bring total equity subscription of NHPC in CVPP to Rs.100 crore as on date. As per the applicable provisions of the Companies Act, 1956, at least seven members/shareholders are required for a public limited company, whereas CVPP has only 04 members/shareholders. Accordingly, NHPC has nominated two more members to the Board to whom shares can be allotted.
NC's favourite NHPC and government of Jammu and Kashmir have jointly nominated Board of Directors (BOD). Chairman M.Y.Khan has been nominated by state government and Managing Director (MD) S.C.Gupta has been nominated by NHPC as per the provisions of the Promoters Agreement. |
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