93 MW New Ganderbal Hydel Project Stalled by Repeated Tendering Hurdles
J&K Power Sector Sees ₹2,347 Cr Revenue Surge, Major Hydropower Projects in Progress
Jammu and Kashmir’s power sector has witnessed significant growth, with Jammu Power Development Corporation Limited (JPDCL) recording a revenue of ₹2,347.61 crore in 2023-24 and Kashmir Power Development Corporation Limited (KPDCL) seeing a remarkable 176% increase in earnings. The government attributes this rise to improved operational efficiency and ongoing hydropower expansion, aiming to make J&K power-surplus in the coming years.
In response to a starred question by MLA Arjun Singh Raju, the government confirmed the revenue boost while clarifying that the unbundling of power distribution companies (Discoms) remains incomplete. Consequently, power sale revenues are still credited to J&K’s consolidated fund, with profit or loss figures yet to be determined.
Declining Power Losses, Major Hydropower Projects in Pipeline
The government reported a steady decline in Aggregate Technical & Commercial (AT&C) losses, signaling improved power distribution. JPDCL’s AT&C losses have dropped from 39% in 2020-21 to 31% in 2023-24, while KPDCL reduced its losses from 65% to 51.98% during the same period.
To achieve power surplus, the government is pushing forward key hydropower projects, including:
- 1000 MW Pakal Dul HEP
- 624 MW Kiru HEP
- 540 MW Kwar HEP
- 850 MW Ratle HEP
All four projects, located on the Chenab River in Kishtwar, are expected to add 3,014 MW of capacity by 2027. Additionally, the 37.5 MW Parnal HEP in Poonch and the 12 MW Karnah HEP in Kupwara will bring the total capacity addition to 3,063 MW by 2027-28.
Another 4,563 MW is projected from upcoming projects, including Kirthai-I, Dulhasti-II, Bursar, Sawalakote, Uri-I Stage-II, Ujh, and Kirthai-II.
New Ganderbal Hydel Project Faces Delays
The government also updated the Legislative Assembly on the 93 MW New Ganderbal Hydel Power Project, which has faced multiple delays since 2012 due to failed tendering processes. Initially, Hindustan Construction Company (HCC) won the contract in 2017 with a bid of ₹819.18 crore but failed to provide the required Performance Bank Guarantee, leading to forfeiture of ₹10 crore in Earnest Money Deposit (EMD) and the cancellation of the contract in 2018.
A fresh tender in 2020, following a package-wise approach used in other projects, failed to receive bids, leading to another cancellation in August 2020.
In June 2022, a new tendering process attracted three bids. Following security clearance from the Ministry of Home Affairs, commercial bids were opened, with the lowest bid (L1) negotiated to ₹1,293.81 crore. However, with the total estimated cost reaching ₹1,630.18 crore, the projected power tariff of ₹8.25 per unit made the project financially unviable compared to other under-construction projects with a tariff of ₹4.5 per unit.
The government cited multiple factors for the delays, including the contractor’s default, lack of response during the COVID-19 pandemic, and high project costs. Officials also stated that the Government of India is finalizing a new hydropower policy to provide financial assistance, making such projects more viable.
“The final decision on proceeding with the New Ganderbal Hydel Project will depend on financial support available under new policies from the Government of J&K and the Government of India,” the government stated.
