Will 93-MW power project in CM Omar’s constituency Ganderbal ever see light?
Srinagar, Jun 1: Nearly three decades after it was first announced in 1996, the fate of the much-anticipated 93-MW New Ganderbal Hydropower Project, located in the constituency of Chief Minister Omar Abdullah, remains uncertain.
Despite its potential to significantly ease Kashmir's chronic power crisis, the project has witnessed a series of delays, failed tenders, and administrative hurdles, leaving its future hanging in the balance.
The run-of-the-river project, planned on the Sindh Nallah, was originally estimated to cost over Rs 800 crore and is designed to house three units of 31 MW each.
It includes a gross head of 163.5 meters and a net head of 142.2 meters, with three penstocks - each 265 meters in length - planned to carry water to the turbines.
Once commissioned, it is expected to generate an estimated 382.82 GWh of electricity annually, potentially transforming the electricity landscape in Kashmir.
However, the path to execution has been anything but smooth.
ìDespite its technical and economic potential, the project has failed to witness concrete progress on the ground,î a senior Power Development Department (PDD) official said, wishing not to be named. ìThe project received its Techno-Economic Appraisal (TEA) from the Central Electricity Authority (CEA) in June 2014, paving the way for execution. In the subsequent two-stage bidding process, Mumbai-based Hindustan Construction Company (HCC) was declared the lowest bidder at Rs 819.18 crore. But the process derailed after HCC failed to submit the required Performance Bank Guarantee. Consequently, the Jammu and Kashmir State Power Development Corporation (JKSPDC) forfeited HCCís Earnest Money Deposit of Rs 10 crore and annulled the contract in January 2018.î
In 2020, JKSPDC adopted a package-wise tendering approach, akin to other major hydel projects like Pakal Dul, Kiru, and Kwar.
But this effort too proved unsuccessful, as the tender failed to attract any bidders, resulting in its cancellation in August 2020.
ìThe most promising development came in June 2022, when a fresh round of tenders received three bids from joint ventures and major infrastructure companies. Security clearance from the Ministry of Home Affairs was obtained in March 2024, and commercial bids were opened. M/s HCC-CPPPL (JV) emerged as the lowest bidder, quoting Rs 1401.8 crore. Following negotiations, the bid was revised to Rs 1293.81 crore,î officials said.
However, cost viability emerged as the new challenge.
The government estimates the total project cost to be Rs 1630.18 crore, translating into a high tariff of Rs 8.25 per unit. This figure stands in sharp contrast to the levelised tariff of Rs 4.5 per unit for other ongoing hydroelectric projects in J&K, making the New Ganderbal project financially unattractive in its current form.
ìThe cost and tariff projections have made it difficult to move ahead with the project under existing financial structures,î said a JKSPDC official involved in the bidding process.
The government in the Legislative Assembly attributed the delays to multiple factors ñ the initial contractor default, the impact of the COVID-19 pandemic on the 2020 tendering round, and the economic infeasibility of the current bids.
ìThe final decision on proceeding with the 93-MW New Ganderbal Hydel Project will depend on the quantum of financial support available under the new policies being finalized by the Government of Jammu and Kashmir and the Government of India,î officials said.
They disclosed that the Government of India was in the final stages of framing a new hydro policy aimed at reviving stalled and unviable projects by offering enhanced financial assistance, especially in the backdrop of cheaper renewable alternatives dominating the energy sector.
