Ratle Power Project lands in serious trouble, GVK formally backs out

*‘Safe passage’ to cost dearly to J&K, set wrong precedence
Mohinder Verma
JAMMU, Sept 8: In a major set-back to the State’s plan of becoming self-reliant in the power sector, Hyderabad-based M/s GVK company has formally backed out of the agreement reached with the Jammu and Kashmir Government on execution of 850 Mega Watt Ratle Hydroelectric Project on river Chenab in Kishtwar district. Though the company has even started winding-up exercise, the State Government has yet not taken any decision about initiating appropriate action against the company for landing the project in serious trouble.
Official sources told EXCELSIOR that few days back, Chairman of the M/s GVK, Dr G V Krishana Reddy called on Deputy Chief Minister, Dr Nirmal Singh, who is also Minister Incharge Power Development Department, and conveyed decision of the company not to go ahead with the execution of Ratle Hydroelectric Project.
Dr Reddy even gave a formal letter to the Deputy Chief Minister clearly mentioning that M/s GVK has lost interest in the project, which was awarded to it on tariff based international competitive bidding process for development on Built-Own-Operate-Transfer (BOOT) basis for a period of 35 years, sources said, adding several reasons have been cited by the company for taking this decision.
It is pertinent to mention here that 850 Mega Watt Ratle Hydroelectric Project— one of the cheapest projects in Jammu and Kashmir was expected to bring prosperity to the people of Jammu and Kashmir. But back-out by M/s GVK has caused major set-back to the State’s plan of becoming self-reliant in the power sector.
Sources disclosed that soon after furnishing formal letter about ‘back-out’ to the Deputy Chief Minister, M/s GVK started winding-up exercise at all levels. It has given one month advance notice to the owners of all those accommodations, which were being used as guest houses and offices both in Drabshalla area of Kishtwar and in Jammu.
Moreover, the company has cancelled the agreement reached with the owners of the vehicles engaged for the project. For the children of Kandani and Drabshalla people, whose land was acquired for the project, M/s GVK had arranged buses for their travel to different schools situated at Thathri and Kilotaran under Corporate Social Responsibility Scheme. This facility has also been withdrawn thereby leaving a large number of students in lurch.
“In this way, the company has not only landed the project in serious trouble but also huge number of people, who were otherwise dependent on this project for their livelihood”, sources rued while expressing anguish over the Government acting as mute spectator to the back-out by M/s GVK instead of taking action against the company as per the agreement.
Stating that there are sufficient provisions in the agreement to check back-out at the stage of execution of project by any of the party, sources said, “it is not understandable as to why Government has not taken any decision in this regard till date despite being aware of the fact that M/s GVK has almost completed wind-up exercise”.
When contacted, Principal Secretary, Power Development Department, Sundeep K Naik confirmed that M/s GVK has conveyed in writing that it would not execute the project. “It is the prerogative of the Government to decide what steps should be taken in the light of company’s stand”, he said in response to a question about implementation of clauses of the agreement on the subject.
Mr Naik also refused to divulge details about the provisions governing the subject.
However, sources said that as per the agreement huge penalty can be imposed on the company for leaving the project at the execution stage as this step would not auger well for the State. “The Government would be left with no other option but to go for re-tendering, which would consume substantial time and during this period the cost of the project would escalate considerably”, they added.
“Any safe passage to M/s GVK would not only cause loss to the State in terms of completion of project within stipulated time-frame and non-generation of electricity but would also set a wrong precedence in respect of other ongoing and future projects”, sources cautioned.