Steps to ensure commercial viability of HEPs
Mohinder Verma
JAMMU, Oct 9: In a major decision, the Government has granted exemption from levy of taxes and duties in favour of all the upcoming hydroelectric power projects of the State during the construction stage. Moreover, in-principle approval has also been accorded for seeking exemption from levy of Water Usage Charges under J&K Water Resources (Regulation and Management) Act, 2010.
Official sources told EXCELSIOR that the issue of granting exemption from taxes and duties in respect of Hydro Electric Projects owned and executed by the State Government came up for discussion in the Cabinet meeting held recently at summer capital of the State.
After thorough deliberations, the Cabinet, in respect of Hydro Electric Projects owned and executed by the State Government, approved grant of exemption from levy of State taxes/duties during construction and 12% free power to the State for a period of 10 years from the date of commercial operation.
“This decision would be applicable in favour of all the upcoming Hydro Electric Power Projects in the State for which the contracts for construction are awarded after the date of issuance of this order to ensure commercial viability of the projects in the overall interest of Jammu and Kashmir”, sources said while disclosing that Finance Department has been directed by the Cabinet to issue necessary notification(s) for exemption from State taxes and duties at the earliest.
Further, the Cabinet has accorded in-principle approval to seeking exemption from levy of Water Usage Charges under J&K Water Resources (Regulation and Management) Act, 2010 for a period of 10 years from the date of commercial operation in favour of all the upcoming Hydro Electric Power Projects in Jammu and Kashmir being in the public sector for which the contracts for construction are awarded after the date of issuance of order, sources said.
The Public Health Engineering, Irrigation and Flood Control Department has been asked by the Cabinet to take further steps in consultation with the J&K State Water Resources Regulatory Authority, Power Development Department and Finance Department to operationalize this exemption, sources further said.
As far as projects being executed by the State Government through Joint Ventures etc are concerned, the Cabinet, as per the sources, decided that necessary exemptions will be considered on case to case basis on the condition that similar concessions will be granted to the projects by the Joint Venture partners. “These decisions will go a long way in ensuring commercial viability of the projects in the overall interest of the State”, sources said.
About J&K State Hydroelectric Projects Development Policy-2017, sources said, “this has yet not reached the Cabinet as the Empowered Committee headed by Chief Secretary has recommended that necessary changes should be carried out in the draft of the policy so that all the projects under this policy are awarded to the Independent Power Producers (IPPs) only under tariff based bidding”.
“Now, the Jammu and Kashmir State Power Development Corporation will carry out necessary amendments in the draft of the policy following which the fresh document will be placed before the Empowered Committee for its examination”, sources said, adding “it would be only after clearance by the Empowered Committee that the draft of the policy will be placed before Cabinet for its approval”.
It is pertinent to mention here that Jammu and Kashmir is bestowed with an estimated hydro-power potential of 20,000 Mega Watts out of which 16475 Mega Watt has already been identified by the Central Electricity Authority. While so far only 3263.46 Mega Watt (16.3% of estimated potential) has been exploited, the achievement with respect to harnessing of small hydropower (up to 25 Mega Watt) has been particularly dismal.
“The objective behind formulating the policy is to lay down a framework for optimum harnessing of hydropower resources of the State particularly the small hydropower and to promote entrepreneurship and private sector investment so that small hydropower can be promoted as an attractive economic enterprise”, sources said.
Though the State had earlier notified the Policy for Development of Small Hydro-Power 2003 and J&K State Hydro-electric Projects Development policy 2011 yet it has become imperative to come up with a new policy that encompasses the learning of past so many years, is investor friendly, facilitates the partnerships with private sector and focuses on time-bound implementation of the hydro-power projects in an environmentally sustainable manner.
The new policy will be applicable for projects with capacity between 10 MW to 100 MW that are proposed to be developed under Independent Power Producer (IPP) mode.
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