Union Cabinet approves investment of Rs 5,282 crore in building 850 mega watt (MW) Ratle hydro-electric project on the Chenab river in J&K.

Signalling the Centre’s renewed efforts to boost investments in the militancy-infested valley, the Union Cabinet has approved an investment of Rs 5,282 crore in building the 850 mega watt (MW) Ratle hydro-electric project on the Chenab river in Jammu and Kashmir.

The project will be jointly developed by the National Hydroelectric Power Corporation (NHPC) and Jammu and Kashmir State Power Development Corporation (JKSPDCL), with equity contributions of 51 per cent and 49 per cent respectively.

The Centre will provide a grant of Rs 776.44 crore to JKSPDCL for its equity contribution in the venture. NHPC will invest its Rs 808.14-crore equity from its internal resources. Secunderabad-based GVK Industries was earlier awarded the project development contract for the Ratle hydro plant and JKSPDCL had signed a power purchase agreement (PPA) with the company in June, 2010.

However, construction work was suspended at the project site due to frequent local disturbances since July, 2014 for which the Jammu and Kashmir government had terminated the PPA in February 2017. Out of the 1,024 metres of tunnel excavations needed for the project, 490 metres have already been dug out.

To make the project viable, Jammu and Kashmir will exempt it from paying water usage charges for 10 years after commissioning. The Union territory will also partly forego the 12 per cent free power that host states of hydro power plants normally receive. Jammu and Kashmir will get 1 per cent free power in the first year gradually rising to receive 12 per cent  free power in the twelfth year.

The Centre expects Jammu and Kashmir to get free power worth Rs 5,289 crore and water usage charges worth Rs 9,581 crore from the hydro project during its project life cycle of 40 years.