CAG red flags slow progress of hydropower projects


The Comptroller and Auditor General (CAG) said out of 374 identified project sites with power generation capacity of 1,725.53 megawatts, only 10 projects with a combined 79.75 MW capacity had been commissioned, with time overruns ranging between four months and seven years.
The hydropower potential of Jammu and Kashmir has been estimated at 20,000 MW, which includes 1,500 MW in small hydro projects. As of October 2021, only 2,813.46 MW (16 percent) of this potential had been harnessed, which included 79.75 MW of small hydro projects. The report on the compliance audit for the year ended 31 March, 2021, said while no action was taken for 225 sites (60 percent) after their identification, bids were invited for 115 sites (31 percent).
It said that for 20 sites proposed under the Prime Minister’s Development Package, the Centre had not acceded to the request of the government of J&K for the release of funds in view of the high project cost and unviable tariff of these 20 projects. It said the IPPs had also attributed poor performance in the development of projects, inter alia, to a lack of financing by banks due to the non-availability of a buyback agreement with the J&K government.
It said three projects with a generation capacity of 12 MW were selling power outside the UT, thereby defeating the objective of hydro policy of providing solutions to the energy problems in remote and hilly areas of the Union Territory, where the power demand was estimated at 4,217 MW (21,887 MU) ending in 2021–22. To encourage private sector participation in the development of hydropower projects with a capacity of up to 25 MW, the J&K government initially brought out in October 2003 a policy to generate power through small hydropower sources of energy.
In order to give further impetus to the exploitation of hydel potential, the government revised the state hydel policy in July 2011 to facilitate projects with installed capacities of 2–100 MW by IPPs and stipulated penalties for failure to meet the timelines fixed for the execution of projects by IPPs.