Every effort should be made by JK government to decide avenues of finance required for precious assets to protect JK from losing Rs 87673.75 crore annually
Irshad Ahrar
One of the key deterrents affecting the growth rate in Jammu Kashmir (also industrial production) is the non-availability of electric power. Hydroelectric Power Projects, though they involve long gestation period are still considered to be the reliable and cheap option.
Jammu Kashmir despite being one of the potential regions for generation of hydro electric power is deficit in power supply and even for its own requirement around 70 percent of power is imported from outside the Jammu Kashmir.
The economic prosperity of the Jammu Kashmir is inextricable from that of its water resources, and its future depends on finding an equitable, sustainable outcome for the region’s most valuable resource.
The disputed territories potential could help to transform it from a valley of death and destruction to a center of excellence. The main asset of Jammu Kashmir is its water resources.
There are near about twenty rivers flowing through Jammu Kashmir. Despite of being rich in hydroelectric resources, Kashmir has been unable to grow to the optimum potential of its agriculture and electricity sectors, its most vital needs for economic and human development.
The projects handed over to National Hydroelectric Power Corporation (NHPC) on power sharing agreement basis are completely under the control of NHPC and no consideration is being given to Jammu Kashmir in terms of power supply as per the earlier agreement.
In fact power generated within Jammu Kashmir by NHPC is being fed to the northern grid from where Jammu Kashmir is purchasing the power.
The JKSPDC presently has only 20 hydroelectric projects with installed capacity of 758.70 MW and actual production of 719.8 MWs located in various districts of Jammu Kashmir including 450 MW Baglihar Hydroelectric project. NHPC also owns three main projects viz. Salal, Dul-Hasti and Uri 1 with the installed capacity of 1560 MW.
Being rich in hydro resources with hydro potential of about 22,000 MW, Jammu Kashmir is suffering from deficiency of 1567.70 MW of electricity to meet the demand of entire region of Jammu Kashmir and also the annual energy loss of 60,000 million units valuing Rs 30,000 crores.
Contribution of electricity supply from all sources is 38.7 percent where in Jammu Kashmir contributes 29 percent and the share of New Delhi projects is around nine percent and a meager contribution comes from the private sector projects which is 0.7 percent less than one percent.
Jammu Kashmir needs a huge investment of US $ 33.84 billion for achieving the target of generating 22000 MW of electricity. Jammu Kashmir has not been allowed to utilise its water resources freely, those, if utilized properly could have been able to produce the increased amount of electricity within Jammu Kashmir and the huge amount of money Rs 2340 crores which it has to pay for purchasing the power outside Jammu Kashmir could have been invested for other developmental purposes resulting in overall growth of Jammu Kashmir’s economy.
The need of the hour is to review the existing power policies to make them more investor friendly in order to rope in greater number of private players for investing and sharing their expertise in power sector.
There has been a growing realisation in developing countries that micro-hydro schemes have an important role to play in the economic development of remote rural areas, especially mountainous ones like in Kashmir.
Total identified potential of River Jhelum is 3560 MW potential of which only 750.1 MWs have been tapped and projects under construction will produce 570 MWs. River Chenab has the highest potential of 10360 MWs of which only 1563.8 MWs have been tapped and further 450 MWs are under construction. Indus is the third biggest source of hydro power in Jammu Kashmir with the total capacity of 2060 MWs of which only 13.3 MWs have been harnessed and 90.26 MWs are under construction. River Ravi has a potential of 500 MWs of power and 25.8 percent have been tapped and still 74.2 percent is available.
Nevertheless, there lies a big gap between actual potential and unharnessed potential. 78.93 percent of the total potential of Jhelum is un-utilized, 84.91 percent of Chenab, 95.62 percent of Indus and also 74.20 percent power potential of Ravi is yet to be utilised.
The focus should be on the main three river basins of Jammu Kashmir that is Indus, Jhelum, Chenab and their tributaries that offer great scope for generation of Hydro electric power.
Because of the abundant water resources Jammu Kashmir could have been able to generate surplus electricity which it can export to neighboring regions, resulting additional revenue to Jammu Kashmir.
The actual requirement of the state is 2500 MWs and the actual potential is 22000 MWs. Jammu Kashmir would earn a net incremental revenue of Rs 97500 crore (15Billion$) after meeting the shortfall and exporting the remaining portion of 19500 MWs to the neighboring regions.
Then optimal exploitation of the available resources of Jammu Kashmir would meet the demand and also will boost the overall economy of Jammu Kashmir. The revenue generating capacity of all projects is estimated at Rs 110000 crore per annum, this will help Jammu Kashmir to invest sufficiently in primary, secondary and tertiary sector for which present expenditure is Rs 11000 crore (Budget figure 2014-15).
If the power projects are financed by World Bank, IMF and other funding agencies, Jammu Kashmir would be able earn Rs 105426 crore revenue from untapped resources and hence the total revenue from all hydroelectric power resources will be Rs 110000 crore which will be used to first repay all the debts within two years.
If the hydro power projects are developed by the central government, it will lead to tremendous loss to Jammu Kashmir and Jammu Kashmir will generate only 17752.25 crore revenue from state run and central share in comparison to Rs 105426 crore if the projects are taken up by Jammu Kashmir herself which is less than the borrowed funds 19414.68 crore from the New Delhi.
Every effort should be made by Jammu Kashmir government to decide the avenues of finance required for the most precious assets to protect Jammu Kashmir from losing Rs 87673.75 crore annually.
If the projects are developed by Jammu Kashmir and if the development is assumed instant and projects operated at full capacity that is if the projects are developed in one year and operated at full capacity then the payback time will be almost two years.
Even though it seems theoretically an ideal alternative and a very favorable situation for the prosperity of Jammu Kashmir as the borrowed money will easily be repaid within two years but it needs a very strong initiative and government support in arranging finances for the purpose which has not happened so far.
Projects can also be developed in different phases and different payback period can be calculated. With the development of hydro-power projects the contribution of the services sector will increase from 45.89 percent to 83.11 percent and with the development of power sector to its fullest capacity revenue of Jammu Kashmir will increase from 5280 to 115280 crore, which is twenty two time more than current revenue.
Therefore, with the owned funds for the administration, Jammu Kashmir would be able to save around 5000 crore rupees and this surplus will be an extra capital available for the development of social infrastructure of Jammu Kashmir.
Unemployment will be alleviated as with the huge surplus available with Jammu Kashmir, new industries on modern lines will be developed, all the unemployed educated youth who are millions in number will find the livelihood within Jammu Kashmir which will serve as a stimulus for peace and prosperity and the sense of alienation will eliminate.
Per capita income of people will rise from Rs 30000 to Rs 131600 preceding to Delhi with per capita income of Rs 118000 and Haryana with Rs 71781. This development will promote Jammu Kashmir as the first richest regions in South Asia.
Jammu Kashmir Government can also provide the industrial loan to the budding entrepreneurs who in turn will create numerous avenues of employment for the young, dynamic and talented youth. Therefore, estimated power potential of Jammu Kashmir is very helpful to bring peace, prosperity and stability in the ongoing crisis.
Author can be mailed at ahrarershad@gmail.com
