CAG report underscores power generation failure

Samaan Lateef

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Srinagar, March 30

The Comptroller and Auditor General (CAG) has reported that J&K has a hydropower potential of 20,000 MW, but only 16% (2,813.46 MW) has been harnessed as of October 2021.

Out of the 374 identified project sites with a capacity of 1,725.53 MW, only 10 projects with a capacity of 79.75 MW (5%) were commissioned with time overrun ranging between four months and over seven years, the CAG mentioned in its report tabled recently in Parliament.

The CAG also found that no action was taken on 60% of ithe dentified sites, while 32 independent power producers failed to fulfil commitments or were terminated due to land issues and slow progress. The hydro policy’s objective for small hydro/mini hydro projects was not achieved.

The CAG report revealed that out of 374 identified hydropower project sites, bids were invited only for 115 sites (31%), while 225 sites (60%) had no action taken.

In July 2011, the government revised the hydel policy to give impetus to exploitation of hydel potential to facilitate projects with installed capacity of 2 to 100 MWs by IPPs and stipulated penalty on the failure to meet the timelines fixed for execution of projects by IPPs.

“Audit noticed that the JKPDC allotted nine projects with potential of 92.50 MW between November 2012 and July 2014. Five IPPs failed to deposit up-front premium of Rs 1.98 crore and did not take up the allotted projects,” reveals the report.

The IPPs attributed their poor performance in project development to lack of financing by banks due to non-availability of buy back agreement with the J&K government. Additionally, the Centre did not release funds for 20 sites due to high project cost and unviable tariff.