No charges, taxes on Kiru, Kawar power projects, PDC recommends

No charges, taxes on Kiru, Kawar power projects, PDC recommends
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Jammu: The J&K State Power Development Corporation (PDC) has recommended exemption of several charges and taxes on at least two power projects it is executing in partnership with the National Hydro Power Corporation (NHPC) on the river Chenab. The power projects are being executed through the Chenab Valley Power Projects Private Limited (CVPPPL).
Official sources confirmed to Kashmir Reader that the PDC Management and Finance Committee met in December 2017 in Jammu, where members agreed to give “concessions” to the Kiru and Kawar projects.
“It was subsequently recommended to PDC Board of Directors (BoD) that no water usage charges be fixed, exemption of all taxes be given, while as no royalty (free power) for first ten years be accepted in case of Kiru (624-MW) and Kawar (540-MW) power projects,” sources said. “The issue will be on agenda of the upcoming BoD meet,” they added.
The exemption of water usage and state taxes was proposed by the NHPC – a 49% shareholder in CVPPPL – after it failed to convince the Government of India (GoI) investment board that it could execute these two projects.
Later, the official sources said, CVPPPL wrote to PDC several times last year about “concessions and exemptions” on the Kiru and Kawar projects “so as to reduce project cost and its tariff and to hasten investment approval by GoI”.
“The water usage charges and state taxes would lead to increased tariff rate, which means we won’t be able to sell the electricity generated in the market,” one PDC engineer explained. “So, to avoid the problem, we are seeking complete exemption from such charges.”
PDC and NHPC are 49% shareholders in CVPPPL, which was formed almost a decade ago. The GoI-run PTC is a 2% shareholder in CVPPPL.
Initially, three power projects were allotted to CVPPPL, including Pakul Dul. Later, the J&K government wished to also execute the Dul Hasti-II project, which is yet to be initiated.
In the case of Pakul Dul, the J&K government has already agreed to the project’s not paying any taxes, nor will water usage charges be implemented on it. The order in this regard was issued in 2013.
Further, the equity share of the J&K government will instead be paid by the GoI, the official informed. In its latest statement, the J&K government has said that the GoI has sanctioned Rs 1,192 crore for the project under the Prime Minister’s Development Programme (PMDP), of which Rs 542 crore has been released and the J&K government has so far spent Rs 300 crore.
“The work on the project is yet to start, as a Letter of Award is yet to be issued,” the PDC official associated with the project said. “It is a multiple-package project where several independent contractors will execute different portions of Pakul Dul.”
Set to cost Rs 8,112.12 crore, Pakul Dul is a 1,000-MW power project which will have four turbines of 250 MW potential. It is expected to be completed in 66 months from the date of start of construction.

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