November 2006 News

J&K cancels mega power project contract

16 November 2006
The Hindu
Shujaat Bukhari

Srinagar: In a major decision, which may affect the long-term power requirement of Jammu and Kashmir, the State Government has cancelled the contract for the construction of the 1200 MW Sawlakote hydel project. The contractors comprised a consortium from Norway and Turkey, besides the Hindusthan Construction Company. The Government has also decided to go in for global tenders for the proposal. To be built across the River Chenab in Ramban area of the Doda district at an outlay of Rs.7,340 crore, it was initiated by the National Congress Government, in power between 1996-2002. The Mufti Mohammed Sayeed Government renegotiated the deal in 2005, and, raised the power generation component to 1200 MW against the earlier over 600 MW. A re-appraisal brought in a saving of Rs.750 crore in project cost. However, following allegations of kickbacks, the Ghulam Nabi Azad Government set up a Cabinet sub-committee to look into the issue, which recommended the cancellation on Wednesday. The Cabinet ratified its recommendations. Sources said though the State submitted a detailed project report to the Central Electricity Authority of India in March 2006, funds were denied with remarks that guidelines of the Union Ministry of Power were not followed by the State while allotting the contract. 'We were denied funding for the project as we had not followed the norms and guidelines of the Power Finance Corporation and Central Electricity Authority of India. As per the Central guidelines, for the construction of a project above 100 MW capacity, it is necessary to go in for competitive bidding and that was the main obstacle. For this, the Government took a decision regarding review of the contract,' Power Minister Nawang Rigzin Jorawas quoted as saying.


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