J&K Pushes for Transfer of Hydropower Projects, Faces Resistance from NHPC

Srinagar, Mar 17, KNT: The Jammu and Kashmir administration has intensified its efforts to regain control of key hydropower projects currently operated by the National Hydroelectric Power Corporation (NHPC). Citing provisions in past agreements and recommendations from expert committees, the government has been pushing for the transfer of projects such as Salal, Uri-I, and Dulhasti. However, NHPC has remained reluctant, leading the administration to explore alternative measures.

The issue of ownership and control over hydropower projects has been a long-standing concern in Jammu and Kashmir. Under a Memorandum of Understanding (MoU) signed on July 20, 2000, NHPC was allowed to fund, execute, and operate certain projects, with an understanding that they would eventually be transferred back to the region. Despite repeated attempts, this commitment has yet to be honored.

A significant recommendation for the return of these projects came from the Rangarajan Committee in 2006, which suggested that the 390 MW Dulhasti project should be handed over to the Jammu and Kashmir government. However, NHPC declined to act on the suggestion. In 2011, a Cabinet Sub-Committee was formed to assess the terms under which these projects were entrusted to NHPC. The committee made several key recommendations, including:

• Salal Hydroelectric Project: Jammu and Kashmir should push for a 47% share of power generation and seek compensation for losses due to reduced allocations. The state should also press for ownership transfer at a depreciated cost.
• Uri-I Hydroelectric Project: The government should exercise its right to buy back the project at its depreciated value.
• Dulhasti Hydroelectric Project: Negotiations should be initiated for ownership transfer and an increase in free power allocation from central projects.
• Uri-II and Dulhasti Stage-II: These projects should only proceed under the direct control of Jammu and Kashmir after the transfer of earlier phases.

Despite these official recommendations, NHPC has not taken any concrete steps to facilitate the return of these assets. The Jammu and Kashmir State Power Development Corporation (JKSPDC) has made multiple attempts to assess the financial worth of these projects using documents such as audited balance sheets and tariff orders from the Central Electricity Regulatory Commission (CERC). By 2016, independent consultants had estimated the current cost of major projects, including Salal (690 MW), Uri-I (480 MW), Dulhasti (390 MW), and Uri-II (280 MW). However, NHPC’s continued reluctance has stalled progress on reclaiming these vital energy resources.

Given the importance of hydropower to the region’s energy security and economic development, the Jammu and Kashmir administration is now weighing alternative legal and diplomatic options to regain control over these assets. Experts believe that a negotiated settlement, possibly involving central government intervention, could be the best way forward in resolving this long-pending issue.