Experts differ on return of NHPC-run power projects

After the formation of the PDP-BJP coalition government in the state on April 4, Chief Minister Mehbooba Mufti has been silent over the return of the National Hydroelectric Power Corporation-run power projects to the state.
The return of the NHPC power projects to the state has been mentioned in the “Agenda of Alliance” —- the framework for governance for the two coalition partners. To restitch the alliance with the BJP, the PDP took around three months, seeking the BJP’s assurances on confidence-building measures, including return of power projects.
Meanwhile, experts differ on the return of the NHPC power projects. They have questioned the organisational and technical capability of the state government’s Power Development Corporation (PDC) to run the power projects.
“I do not believe there will be any change in the fortunes of the state post the return of the projects. I apprehend that we could be worse off post their return,” said Iftikhar Drabu, who has worked on some of the major hydropower projects in India and China.
The state government has projected the liability of power purchases by the end of March as Rs 6,949 crore. “The PDD had a huge revenue deficit during the financial year 2014-15, amounting to Rs 3,913.50 crore,” an official handout has said.
Drabu said for 2013-14, the energy demand of the state was 15,613 MU and energy available was 12,187 MU. “The seven NHPC projects generated 8,882 MU with the revenue of Rs 2,463 crore while the 21 projects with the PDC generated 3,738 MU with the revenue of Rs 902 crore. Thus, the total energy available from the NHPC and the PDC projects would be only 12,620 MU with revenue of Rs 3.365 crore, which is a whopping 20 per cent shortfall,” he said.
Drabu said the cost and revenue of the projects post their return would remain similar to the present scenario under the NHPC. “The rate of profit from the projects would be the same i.e. 15.5 per cent return on equity which is certainly not a windfall,” he said.
However, civil society members have questioned the timing of Drabu’s assertions, brother of PDP leader and Finance Minister Haseeb Drabu.
Noted economist Shakeel Qalandar said: “It seems he (Drabu) wants to create another discourse to let people believe that the power project will not bring any good to the state. In Kashmir, everyone knows that our resources are being looted by the NHPC.”
Qalandar said post the return of the power projects, the state exchequer would get fatty and the power purchase bill would go drastically down.
He said if the government had apprehensions on maintaining and operating the projects, it could outsource them like the Baglihar-I.