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Fund crunch hampers Shahpur Kandi project

Gurpreet Singh Nibber, Hindustan Times  Chandigarh , July 26, 2013
First Published: 01:02 IST(26/7/2013) | Last Updated: 01:03 IST(26/7/2013)

The much-delayed 168-MW Shahpur Kandi project on the Ravi river in Pathankot district has hit another roadblock, with the Centre yet to release funds to the tune of Rs. 190 crore to the Punjab irrigation department.


The project, an extension of the Ranjit Sagar Dam (RSD), was cleared by the Centre in September 2009, more than a decade after the commissioning of the 600-MW RSD in 1998. The project site is on the Punjab-Jammu and Kashmir border.

Irrigation department chief engineer Harvinder Singh told HT, "Of the Rs. 650-crore grant, only Rs. 26 crore were received two years ago. As per the schedule, Rs. 90 crore were sanctioned in 2012-13 and Rs. 100 crore in 2013-14, but we are still awaiting their release."

Harvinder Singh said the request for funds for 2012-13 was turned down as the union ministry of water resources wanted Punjab to settle all issues with the neighbouring state. He said all issues with J&K had now been resolved, adding that a request for the release of funds had been sent two months ago.

Of the total project cost of Rs. 2,287 crore, 71.39% is to be contributed by the Punjab State Power Corporation Limited (PSPCL) and the rest by the state irrigation department. The department's share is in the form of a grant from the union ministry, while the PSPCL has to raise its share on its own.

The PSPCL has approached the Rural Electrification Corporation (REC) for long-term loans after the Power Finance Corporation (PFC) backed out. Initially, the PFC agreed to give Rs. 1,657 crore, but things reportedly fell through as the rate of interest was higher than the prevailing rates.

After the commissioning of the Shahpur Kandi project, the RSD would generate 600 MW (it's now generating 300 to 325 MW). The RSD and downstream Shahpur Kandi project were planned as twin projects to conserve river water.

At this stage, if the RSD is made to generate optimum power capacity, a huge amount of water (about 12,000 cusecs) is wasted as it flows into Pakistan. The Shahpur Kandi project would help conserve water in a reservoir upstream of the project.

PSPCL chairman-cum-managing director KD Chaudhary said an arrangement with the REC was being worked out, while hoping that funds would start arriving soon.

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