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The Infra Roadblock
Several big projects in J&K have been hit as companies struggle with labour unrest and difficulties in land acquisition and acquiring govt clearances
Ishfaq Naseem Print Edition:
December 6, 2015
On July 14, Transport Minister Nitin Gadkari was witness to a rare engineering feat - digging of a nine-km road tunnel, the country's longest, between Chenani and Nashri in Jammu & Kashmir. The tunnel will reduce the distance between Jammu and Kashmir regions by 30 km. It will have the country's first Integrated Tunnel Control System, where ventilation, fire control, signal and communication systems will be automated.
But the project, to be completed in May 2016, has not gone off without hiccups. Last October, Australia's Leighton Contractors backed out after Mumbai-based IL&FS Transportation Network refused to pay more. "Leighton had agreed to take up the project for a lump sum. The workers went on a strike demanding higher wages. The difficulty was aggravated after floods in September 2014 closed the national highway for a month. Leighton raised excess bills and later withdrew," says an official of IL&FS. For IL&FS, it was a big challenge. "IL&FS has now hired sub-contractors. The work is going on smoothly," says NHAI Project Director, Jammu, R.P. Singh.
The Rs 3,800-crore tunnel is symptomatic of problems that most big infrastructure projects in the state are facing. While some, such as acquisition of land, lack of funds, delay in clearances and labour issues, are common to all the states, in Jammu & Kashmir, difficult terrain is proving to be an additional stumbling block.
Besides IL&FS, Hindustan Construction Company (HCC), Ramkay Infrastructure, GVK and Jaiprakash (JP) Associates, which are implementing some landmark projects, are also facing difficulties. As most of these projects are in road and power sectors, this is also hitting the state's economy as industries grapple with power cuts and spend more to transport goods due to lack of high-quality road infrastructure.
The Infra Deficit
The only road that connects Kashmir with other parts of the country is the Jammu-Srinagar national highway. It is blocked in winter due to landslides. Government estimates reveal shortage of 3,000-km roads in the Kashmir division - to build them over Rs 3,000 crore is needed. The Power Development Department (PDD) figures show that the state faces a power deficit of 27 per cent during peak hours. The situation has not improved much over the years. And given the mess the new projects are in, it is unlikely to do so in the near future either.
INFRA FACTS
- Road length maintained by the Public Works Department increased from 18,368 km in 2007/08 to 31,921 km in 2013/14.
- A total of 520 bridges are under construction in the state at a cost of Rs 1,180 crore.
- The state buys 72.95 per cent of its power from other sources
Source: State Economic Survey 2013/14
For instance, four-laning of the 300-km Jammu-Srinagar highway has been delayed due to land acquisition issues at the 67.7-km Srinagar-Banihal section. The contract was awarded in September 2010 to a consortium of Ramky Infrastructure (74 per cent stake) and China's Jiangsu Provincial Transportation Engineering Group Co Ltd. The venture had to design, build, finance, operate and transfer the project on an annuity basis. The concession period was 20 years. The semi-annual annuity was Rs 134.82 crore and the estimated project cost was Rs 1,101 crore. However, only 62 per cent work had been done by the end of September. It is likely to be completed by June 2016, says a government official.
Also, Kashmir is still not connected with the country's railway network. The Jammu-Udhampur-Srinagar-Baramulla line has been delayed by years. The plan for connecting Kashmir with the rest of the country was mooted in 1994. It was supposed to be completed by August 15, 2007. However, work on major stretches of this 345-km line is still incomplete. These include the 110-km section between Katra and Banihal. The latest target date is now December 2020. Within Kashmir, the 18-km section between Qazigund and Anantnag was completed in October 2009. The railways also opened the Banihal-Qazigund section in June 2013.
'We were ready to discuss the matter, but the company (GVK) did not seem to be interested. We would have provided security,' says Nirmal Singh, J&K Deputy Chief Minister and Power Minister
Indeed, delay in clearances and difficult terrain have made some companies give up. For instance, in February 2004, JP Associates was awarded contract for a stretch of the Udhampur-Srinagar line for Rs 168 crore. It was to be completed in three years. However, non-availability of land forced JP to foreclose the contract in April 2007 after execution of work worth Rs 27.82 crore. It filed a Rs 35.71 crore-claim for "idling of manpower, equipment and infrastructure" against which arbitrators declared an award of Rs 21.82 crore.
On Banihal-Qazigund section, the Mumbai-based HCC bagged the contract for the 10.9-km Pir Panjal tunnel. The project cost was Rs 413 crore. However, the company faced problems of "delay in handing over the site, increase in scope of work due to change in support system to retain the tunnel strata and delay in supply of drawings." An HCC spokesman says the work has now been completed.
In Srinagar, the Economic Reconstruction Agency (ERA) allotted the Rs 247 crore Jehangir Chowk-Rambagh expressway corridor flyover project to Kolkata-based Simplex Infrastructures. That was in 2012. However, the work could start only in September 2013 as residents resisted dislocation. The deadline has been revised from September 2016 to March 2017.
"There were issues over settlement of people that have been sorted out,'' says ERA Director Malik Basharat Ahmad. He said the deadline was revised after damage to machinery in last year's floods. "The machinery has been repaired. It could not be done in time as the repairs were done outside the country. The workforce also fled due to floods," he says.
Power Pangs
In the power sector, upgrade of transmission lines and construction of several hydel power projects has been obstructed. In July 2014, GVK stopped work on the 850-MW Ratle project on Chenab river at Drabshalla in Kishtwar district saying that the "atmosphere around the site was insecure.'' The company was forced to do this after people entered its site offices "and harassed the staff demanding employment."
Work on four-laning the Jammu-Srinagar national highway is progressing slowly due to land acquisition issues. (Photo: Farooq Shah)
"The company stopped work after the mob didn't relent and locked the offices. Local politicians have been demanding that people known to them be employed," says a senior official. Recently, the GVK management wrote to the government that "it doesn't want to continue the project."
GVK had bagged the Rs 5,500-crore project on a build, own, operate and transfer basis from the PDC in May 2010. It was scheduled to be completed in February 2018. The state would have got 16 per cent power free of cost and 55 per cent at Rs 1.44 per unit for 35 years.
Deputy Chief Minister and Power Minister Nirmal Singh says that GVK backed out saying it was not viable for it to continue the work. "It was earlier asked by the state government to pay water use charges. The company has written to us that it will not continue work due to the charges." Singh, however, asserts that the government is ready to offer concessions. "We were ready to discuss the matter, but the company did not seem to be interested. We would have provided security." The government may ask the PDC to do the work.
'There were issues over settlement of people around the Srinagar expressway project, but they have now been sorted out,' says Malik Basharat Ahmad, Director, Economic Reconstruction Agency
Work on another power project, Pakal Dul, couldn't be started as Chenab Valley Power Projects Ltd (CVVPL), a joint venture between National Hydro Electric Power Corporation, Jammu & Kashmir Power Development Corporation and PTC India, has not issued the allotment order. The 1,000-MW project, one of the largest in India, was bagged by a consortium of Patel Engineering Ltd, Limak Holding of Turkey and state-owned Bharat Heavy Electricals Ltd in February last year. It was scheduled to be completed in 66 months. A senior official of CVVPL says the decision over the allotment couldn't be taken due to delay in constitution of the company board.
Singh, however, says that "the CVVPL board will be constituted shortly to clear other projects that are to be constructed through the joint venture."
The upgrade of power transmission infrastructure is also way behind schedule. The state government recently took note of the slow pace of work by Kolkata-based EMC Ltd. Minister of State for Power, Mohammad Ashraf Mir, while reviewing the progress of the Restructured Accelerated Power Development Reforms Programme, asked officers to convey the government's displeasure to the company. The cost of the project is Rs 889 crore. "The agreement for the project was signed on May 19, 2014, and the work is to be completed by March 2016. The work got delayed due to floods in September 2014,'' says a senior government official. A company official, looking after the project in Kashmir, says, "We are not responsible for the delay. Our infrastructure was damaged in last year's floods." The company is working to reduce transmission losses in Srinagar city and the major towns of Tral, Ganderbal, Budgam and Pulwama in Kashmir.
Also, the Pune-based capital goods manufacturer, Thermax, was to work with Iceland-based Reykjavik Geothermal to construct a three-MW geothermal project at Puga Valley in Ladakh. However, a senior official in the PDC said work couldn't be started due to non-availability of funds.
(Ishfaq Naseem is a Jammu & Kashmir based writer.)
Why Jammu and Kashmir infrastructure projects are facing roadblocks
