(Dr. Javid Iqbal, 65, was born in Srinagar. He attended the D.A.V. School, Srinagar, and graduated in Medicine from the Government Medical College (GMC). His professional service in medicine includes work in the Middle East for three decades. During his days at the GMC, he captained the cricket team. He enjoys writing and staying close to his children in far away lands.)
From the Rising Kashmir website (article removed within a few hours after being published) ....
Is the State Ready to Pay Rs 2000 crores as its Depreciated Cost?
Thursday, 05 Apr 2012 at 11:19
NHPC has a structured method of operation, but their agreements deals only with power production
Dr Vijay Sazawal
As a student of "street politics/public discourse" in Kashmir (even after being at it for over two decades, I see no hope of graduating from a talib grade), it is always fascinating to see how ruling elites manage to deflect public attention from real issues in Kashmir towards various academic exercises. The latest being the NHPC matter. And so another villain south-of-the-border is born.
It is not surprising that every newspaper is filled with stories vilifying NHPC, following I suppose the cue provided by the Chief Minister. For the record, most of the stories in valley newspaper vilifying NHPC show a singular lack of knowledge, and facts are slim. First, we heard (through the valley scribes) that there are no legal documents regarding execution of NHPC projects at some power stations in the valley. Next, we hear that there may be "draft" legal documents. Yet another group says it does not matter what documents are there, the will of the people has changed and the documents need to be reviewed by the State legislature.
Similarly, there is the matter of Rs 2350.85 crores that the CM says NHPC owes to the State. As you rightfully pointed out, how the CM arrived at that figure is unclear. Is it to cover tariffs which the State would not have paid if NHPC had transferred some power stations unilaterally to the PDD as the State has requested? Or is it royalty payment not received from NHPC, or even the gap between power promised and not delivered, or something else?
The fact of the matter is that NHPC has a very structured method of operation, but their agreements deal only with power production. There are two other entities very intricately involved with getting that electricity to your home, and these are the Power Grid Corporation (PGC) that runs the transmission lines, and the Power Trading Corporation (PTC) which sets the tariff. Each one of those three companies is responsible to get power into your home - you run foul of one, the whole deal is undone.
But sadly, intelligentsia in the valley is all obsessing on the NHPC. I know of instances when the state has not paid its dues to the PGC and were given restricted flow of power. And even if the Rangarajan Committee recommendation on Dulhasti were to be implemented, is the State ready to pay Rs. 2000 crores as its depreciated cost? The reality is that NHPC follows a well developed basis for its agreements with States that has a bit of comfort for both-the State gets guaranteed fraction of production, royalty payments, and most importantly, jobs for its subjects, whereas NHPC gets the right to build to locate and the facility on State land, and sell majority of its production to the northern grid/other states. But of course in Kashmir every agreement is seen as exploitation, and conspiracies against Kashmiris are a common fodder.
No wonder, the Indian private sector would not want to touch us with even with a 100 meter pole.
The shameful part is that the State gets, (a) an annual budget that far exceeds on a per capita basis from its neighbourly states, (b) the share of the outright grant from the central government (pegged at 58% in the 2012-2013 State Budget) that also exceeds on a per capita basis from similar grants given to other states, and yet the whining never stops.
It is not NHPC but poor governance and utter corruption in state institutions that are responsible for the mess in J&K. This is regarding not only electricity, but just about any other public distributed service (PDS) in the valley. You may need to read the two Transparency International (TI) reports again.
IWT & NHPC
Monday, 09 Apr 2012 at 09:10
Questions abound, answers elude
Dr Javid Iqbal
I had no intention of pursuing Indus Water Treaty [IWT] or National Hydro-electrical Power Corporation [NHPC] in today’s ‘Talking Point’ but for a compelling factor. Following last Tuesday’s write-up on NHPC an e-mail from a well meaning friend in Washington DC prompted a response. To note a fact, my friend is as much an ethnic Kashmiri as I am.
And I would like to hold, he is as much concerned as any Kashmiri could be about what has befallen Kashmir. He chose a personal communication rather than airing his views in an open column in ‘Rising Kashmir’ so as to provide readers an alternative stream of thought. I may respect his option by revealing his contention, not his name.
My friend contends “It is always fascinating to see how ruling elites manage to deflect public attention from real issues in Kashmir towards various academic exercises. The latest being the NHPC matter. And so another villain south-of-the-border is born”. He could be right, leaders do have strategies to deflect public opinion though I wouldn’t credit the mainstream leadership in Kashmir [the stream my friend alludes to] with such wherewithal so as to think of wider strategies. Kashmir’s civil society has moved far ahead of days when it could be taken for ride by mere slogans. But I hasten to admit that for long in yesteryears, Kashmir was led into political channels espousing popular sentiment, though inadvertently to the detriment of economic challenges. Issues relating to IWT and NHPC form an economic challenge.
Without casting south &/or north in villainous role, the need of the hour is to make friends and pursue a win-win strategy. But before we do that Kashmiris of all hues would have to develop Kashmir centricity as the primary option. All other options need to flow from that primary source. Much before NHPC was conceived in 1975, IWT was signed on September 19, 1960 in Karachi. Pandit Nehru, the Indian PM from our south and Pakistani President Ayub Khan from our north were signatories. The treaty has Punjab centricity written all over it. India’s total control over eastern rivers of Indus basin was compensated by holding sway over western rivers of the basin. In addition World Bank provided US and UK funded resources to finance the canal network meant to save the desertification of eastern part of Pakistani Punjab. Whereas the interests of Indian and Pakistani Punjab were catered to, the State of Jammu and Kashmir was divested of control over its water resources, except for what the ‘Run of the River’ allowed it.
India might have stayed in tune with international obligations by sharing waters with Pakistan, being an upper riparian nation. The world remained unconcerned, the lack of concern continues over the fate of states within the nation. It might be admitted that irrigational rather than hydro-electrical potential was the major concern in 1960. J&K is getting barely a share of 0.65 million acre feet (MAF) out of a total water flow of 135.6 MAF from rivers flowing through or originating from the state. Answering JK Rajya Sabha member Ratanpuri’s supplementary Pawan Bansal, the union minister of water resources quoted that figure in March, 2012 [KTNS report: 21/03/2012]. IWT provisions do not meet the demands of natural justice unless someone is callous and highly injudicious to take 0.65 MAF of 135.6 MAF [less than 1%-0.88% precisely] as a fair share. J&K State, an upper riparian state administered by a nation--India has a part of it [part of erstwhile pre-1947 J&K State] administered by another nation-Pakistan [PaK] as the lower riparian area are as well as Pakistani Punjab. Sindh in Pakistan…lower riparian area vis-à-vis Pakistani Punjab is as much a complainant as upper riparian J&K of Punjab centric IWT.
NHPC! What NHPC provides to state remains a fraction of what it takes from the state. In the power projects commissioned up to 2010 in various states, NHPC’s total generation amounts to 5295 MW, J&K power plants generate 1680 MW, which is about one third of the total generation capacity. This is accounted as under:
S. No Power Plant Capacity YOC
(1) Salal-I 345MW 1987
(2) Salal-II 345 MW 1996
(3) Uri-I 480 MW 1997
(4) Dul-Hasti 390 MW 2007
(5) Sewa-II 120 MW 2010
Total 1680 MW
YoC—denotes year of commissioning
1680 MW out of 5295 MW works up to 31.7%, almost one third. J&K in return remains poorly compensated. We may now get to analyze the “very structured method of operation of NHPC” my friend alludes to.
NHPC has grown immensely. From an initial 200 crores in 1975, its investment base has enhanced to over Rs 38,718 crores [193.5 times rise] with an authorized share capital of Rs 15,000 crores. In 2009-2010 NHPC made a profit after tax of Rs2090 crores and increase of 94% over the previous year profit of 1050 crores. NHPC is among the top ten companies in India in terms of investment, giving it prestigious Miniratna status. A quantum jump of 94% in just one year has few parallels worldwide. Bill Gates to oil cartels of Texas [in boom periods of price hike] or for that matter the software giants of Silicon Valley would be proud to emulate such a feat. Reputed international corporations often aim for anything between 15-20% including the expenses related to social corporate responsibility – on a comparative basis 94% is hard to explain especially for a corporation dealing with public utility projects. That is why there are multiple litigations around India against NHPC’s “very structured method of operation”. Assam Government recently put on hold the 2000 MW [Subansiri Lower Hydroelectric Power Project (SLHEPP)] in adverse circumstances fuelled by agitation by All Assam Students Union (AASU). Orissa has three projects on the anvil facing a similar fate, NHPC deals are increasingly being seen in bad light.
“NHPC deals only with power production” says my friend. A fellow columnist—Abdul Majid Zargar, prominent member of civil society, a reputed chartered accountant well versed in corporate affairs, notes in one of his columns on NHPC activities “On an average, the completed projects have incurred a delay of 8-12 years, those under completion are running behind schedule of 9-12 years. The average delay period for both the completed and yet to be completed projects is 60% more than compared to performance of other players in the field. This in effect results in project overrun costs which then enhance the generation cost ultimately to be borne by our State Govt. and its consumers. To put it simply, NHPC can afford all luxuries of delay because ultimately the cost has to borne by you & me”.
“NHPC getting electricity to our homes” my friend alludes to may be compared to the days when NHPC was not operating—pre 1975. Purely from a layman’s point of view, the change NHPC is supposed to have made is not perceptible given the increased production and population explosion ratio. Living on Mohura, Upper Sind and Ganderbal and other power projects managed by the state and living on NHPC “Getting electricity to our homes” has a difference. Many homes use inverters to store electricity so as to get a feeling of coming out of dark ages during long hours of power cuts.
I agree with my friend cent percent when he notes “It is not NHPC but poor governance and utter corruption in state institutions are responsible for the mess in J&K. This is regarding not only electricity, but just about any other public distributed service (PDS) in the valley”. My worthy friend seems to exonerate NHPC in saying that “it is not NHPC”. Well I believe there cannot be many takers to this statement of his – as anyone can perceive that over here, questions abound, and answers elude.