Contract for Rs 7,340 cr power project in J&K cancelled

The Jammu & Kashmir government has decided to float fresh tenders for the construction of the 1,200 Mw hydro-electric power project over the river Chenab in the Ramban area of District Doda.

The Cabinet, in a major decision on Wednesday, cancelled the contract given to the consortium of Spass International of Norway, Ozaltin Construction Company of Turkey and Hindustan Construction Corporation here, for the construction of this power project.

In the meeting held last evening with Chief Minister Ghulam Nabi Azad, the J&K govrnment unanimously resolved to cancel the old contract and go in for the global tenders for this major hydel project over the Chenab, just downstream the 450 Mw Baglihar hydel project and about 25 km upstream the 390 Mw Salal hydroelectric power project.

The decision regarding a review of this Rs 7,340 crore project came after a Cabinet sub-committee, constituted by the chief minister and comprising six Cabinet ministers, submitted its report to the state cabinet.

The sub-committee, in a meeting held in the morning, took the final decision regarding the fate of this important power project in J&K, to be initiated by the J&K Power Development Corporation. The project was delayed for several years due to funds not being tied up.

When contacted, Minister for Power Nawang Rigzin Jora said the

Cabinet sub-committee in its concluding meeting held in the morning unanimously decided to cancel the contract and follow the guidelines of the Union power ministry and the Central Electricity Authority (CEA) by inviting global tenders.

Official sources told Business Standard that the previous J&K government, led by Mufti Mohammed Sayeed, had offered the contract to the consortium without international bidding.

Though the detailed project report of the Sawalakot hydel project was submitted by the state government to the CEA in March, the funds could not be secured because the Power Finance Corporation refused to lend the money to J&K on the grounds that "the guidelines of the Union ministry of power were not followed by the state while allotting the contract work".

Other financial institutions also reportedly refused to lend money to J&K because competitive biding was not done.

After this, the Cabinet decided to review the contract and the sanction earlier accorded to the consortium. The Cabinet sub-committee, comprising ministers from all the coalition partners in the government, conducted three meetings in the past four months.

The project will have two units of 600 Mw each and will be constructed on the run-of-the-river scheme.