April 07, 2020
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Spring In The Valley

Foreign investors are wooed in a bid to boost the J&K economy

Spring In The Valley
It sounds like the perfect icing on the cake. Within days of the withdrawal of Pakistani troops from the upper reaches of northern Kashmir, the state government'in coordination with mandarins of the Ministry of External Affairs'have quietly initiated a process that observers claim will slowly alter Western perceptions about the strategic northern Indian state. The buzzword this time is investment, and not media gossip about Kashmir in ethnic Indian newspapers abroad. The state government is seeking increased investment from European and American companies in Kashmir, a process to focus global attention and score what it calls a permanent headstart over Islamabad's propaganda about life in the state.

Last week, senior officials of the Jammu Kashmir Power Development Corporation (JKPDC), a state-owned company, signed an MoU with a major Norwegian consortium for construction of the 600 MW Sawalkote hydroelectric project. The consortium handling the $720 million (Rs 3,000 crore) turnkey project is Statkraft Anlegg AS and Kvaerner Energy AS. The Norwegian consortium is expected to raise 85 per cent finance (from both Indian and foreign lenders) for the project, which will involve construction of a 185 metre, seven radial gate concrete dam on the Chenab river.

'We submitted the most competitive bid and no wonder the JKPDC chose us to execute the project,' says Arn Finn Hardersen, president and ceo of Statkraft, who flew in specifically to sign the MoU with senior JKPDC officials in the presence of the state chief minister, Dr Farooq Abdullah. Statkraft is a major player in hydro power projects in the Nordic region.

Senior state government officials told Outlook that efforts were on to garner major investments from American, Canadian, German and South Korean companies in the state. 'People in Kashmir today want more projects like Sawalkote. They want more economic and industrial activity because they are tired of being in the news for the wrong reasons,' says one official, disclosing that a Swedish consortium led by power giant Skanska will soon start work on the 360 MW Kishanganga project. Besides, the government will soon take up the Uri II project as well. The state government is also talking to several multinationals about setting up new tourism-related projects. 'We need to implement all these projects to become self-sufficient in power. Moreover, water is our only resource, and the state needs to harness the remaining power potential to turn hydro power into a revenue generating industry,' says J.A. Shamir, official spokesperson of the state government.

According to the 15th electric power survey of India, against the total demand of 5,500 mus (million units) of energy at present, the state's self-generation is only around 900 mus. Kashmir's share of free power from the central government projects is 700 mus and the state is currently importing about 4,000 mus of energy at a cost of Rs 600 crore per annum. The demand for power will increase to 7,000 mus in 2002 corresponding to a peak load of 1,600 MWs. The state's share of free power from Uri is only 300 mus. To bridge the gap between demand and self-generation, the state has decided to implement a number of hydel projects in a phased manner. To begin with, it has decided to implement five major projects'Balighar, Kishanganga, Uri-II, Sewa-II and Sawalkote projects which will result in a capacity addition of 1,800 MWs and generation of 10,000 mus of power by the year 2007. The energy requirement of the state by 2007 would be over 10,000 mus. Surplus power will be fed to the northern grid to reduce the energy crisis in the northern states.

'We'll now start looking into the designs of the project,' adds Henning Fjeldstad, executive vice president, Statkraft. He also disclosed that the Norwegian consortium has appointed Westland Fbanken as the financial advisor for the project. When asked about apprehensions in raising funds for the project, Fjeldstad said: 'India is a very reliable economy with a good name in the international financial markets. We see enough solutions that are feasible.'

Fjeldstad also remained unperturbed about the prevailing political tensions in the state: 'We know the area of Kashmir very well. We have been there for more than three years now, having worked on the 320 MW Dulhasti project. Kashmir is quiet. We would not have entered the area if it was not secure. Today, everyone in Kashmir is looking for peace.' If the Jammu and Kashmir government does manage to get foreign investments in, it will be perhaps a sweeter victory than the diplomatic and military triumph India scored in Kargil.

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