CHANDIGARH: The Punjab Government has rejected the Japanese offer to finance and execute the Rs.1,200 crore Shahpur Kandi hydel project. The foundation stone of the project was laid down by the Prime Minister, P.Y. Narasimha Rao, during his maiden visit to the state in April last. Rao had also assured mobilization of funds for this project. The Japanese offer had come through the Center. «The project is to be constructed 13 km downstream Ranjit Sagar Dam on Ravi, The completion of this project ‘was to synchronize with the completion of the Ranjit Sagar dam. Full benefits from the Ranjit Sagar hydel Project would accrue only after the completion of the Shahpur Kandi project.

According to the sources, the conditionalities attached with the Japanese package did not suit the state government. Going by the Japanese offer, the construction work would not have started before 1999 which the state government can ill afford.

The Japanese had proposed to undertake the design of the project afresh and that would have taken more than two years. The consultancy fee, which ‘was originally putataboutRs.5Ocrore, was later brought down to Rs.36 crore. ‘The designing of the project has already been done by the state engineers.

The Japanese also wanted the state government to invite competitive bidding by floating global tenders for the execution of the project. The trade unions at Ranjit Sagar dam are already protesting against the decision of the state government to invite pirate parties for construction. The Ranjit Sagar dam is being constructed by the Irrigation Department and the Punjab State Electricity Board.

In view of the resource crunch, the state government is considering various options. It is proposed to set up a ‘company in the joint sector with 50% ‘equity participation by the state government, This Company could also raise money from the market to finance the Shahpur Kandi project. Yet another alternative is to go slow on the Ranjit Sagar dam and divert the funds to start construction of Shahpur Kandi project.

However, political compulsion of the state government would come in the way of this proposal. The Chief Minister, Mr, Beant Singh, wants the Ranjit Sagar dam to be constructed by the end of 1996, well before the next Assembly election due in February, 1997, He would like to project it as the biggest achievement on the development front. Interestingly, Rao had also promised to make rest of the funds available for the Ranjit Sagar dam, provided it was completed by the end of 1996. However, the Center is yet to come up with any concrete financial package for either of the two projects.

One of the leading industrial houses in the country, the Raunag Group, is also showing keen interesting the power sector in Punjab. The state government is also seeking private investment for the Goindwal thermal and Bathinda thermal, stage V and VI. Global tenders have already been invited for the Goindwal thermal project and the offers are being short listed. The state government has received 13 offers for this project.

‘The construction of Bathinda thermal stage V has already started and the state government has spent about Rs. 100 crore.

Article extracted from this publication >> June 23, 1995