Srinagar: The fate of the 93-MW New Ganderbal hydropower project remains unclear as the construction agency — Hindustan Construction Company Limited (HCC) — has not signed the contract even though the deadline ends a week from now.
By November end the HCC has to sign the contract, over which disagreements have arisen after the new tax regime of GST came into force in July this year.
“The HCC had requested for more time to work on implications of Goods and Services Tax (GST) on the contract. They are supposed to sign the contract by the end of November,” top sources at Jammu and Kashmir State Power Development Corporation (JKSPDC) said.
“The (HCC) officials have promised that the project will happen but until and unless the contract is signed, nothing is concrete,” the sources said.
JKSPDC, which is the executing agency, had invited tenders in 2012 and the allotment (letter of intent) was issued in favour of HCC in August 2017. The 93-MW power project on upper Sindh in Ganderbal is being constructed at a cost of Rs 820 crore and the construction giant was supposed to sign the contract by September 4. However, after GST was implemented across India in July this year, the HCC excused itself and did not sign the contract for the power project that is owned by the state of J&K.
“If the HCC fails to sign the contract, state government will be exploring other options,” the sources said. However, the officials remained tight-lipped about the “available options”.
Conceived in late 1960s, the three-turbine power project was finally put to bidding in 2012 and the same year, HCC won the bid among six contractors. However, the project was cleared by the state government this year and the work was scheduled to start in October.
A JKSPDC official said that the HCC officials had agreed to the Letter of Intent (LoI) issued by the corporation for the New Ganderbal Power Project “but they claimed that they have no clarity yet (about the contract) following the implementation of GST”.
“There were series of meetings and the HCC officials have agreed that the relevant provisions in the contract cater to their concern regarding GST,” officials asserted, “the road is clear and we are hopeful that the contract is signed without further delay.”
The official added that the HCC had not yet submitted its (bank) ‘performance certificate’ to the JKSPDC, which is “necessary for the project contract”. “In this case, the HCC was supposed to furnish the bank performance certificate of almost Rs 80 crore which is important to be submitted before signing the contract.”
The JKSPDC has already started work on the approach road of the project which is supposed to be completed within 48-months after signing of the project.