Attracting investors: AJK adopts new lease policy for hydel power projects

Officials say government land to be offered at minimal rates.

MUZAFFARABAD: The Power Development Organisation (PDO) of Azad Jammu and Kashmir (AJK) that monitors and executes power generation projects in the region has introduced a land lease policy on the pattern of Punjab to attract investors to set up hydel projects in the state to deal with the worsening energy crisis, sources told The Express Tribune.

Land in AJK is acquired under a lease policy issued by the Board of Revenue. The policy applies to the establishment of private industry excepting the hydel sector, but the facilities extended to investors for hydel projects under the Power Policy 2002 are not included.

The sources revealed that at a recent PDO board meeting in Kashmir House, Islamabad, chaired by PDO Chairman and AJK Prime Minister Chaudhry Abdul Majeed, PDO Minister Chaudhry Yaseen who is also a board member, discussed a lease policy for setting up hydel power projects, which was not on the agenda.

In AJK, the price for government and private land is much higher than in Punjab and other provinces. This is impeding the development of new hydel power projects in the private sector, said Yaseen, according to sources.

The minister said that in the face of a severe energy crisis governments were trying hard to attract private investors in an effort to produce as much energy in the shortest possible time. Therefore, rates need to be brought down to a minimum level and the current policy is not yielding desired results, said sources quoting the minister.

Yaseen pointed out that the impact of land price would ultimately affect price per unit paid by consumers. He reportedly said private-sector hydel power projects would be handed over to the AJK government after 25 years.

After the 18th amendment provinces and AJK can execute projects without any limits imposed by law. Punjab is leading the effort by introducing hydel, solar and thermal energy projects in the private sector, he is quoted to have stated.

Sources told The Express Tribune that Munawar Iqbal, a representative of the Private Power Infrastructure Board, who was also present at the board meeting, pointed out that in case of private land, there was a marked difference in price between AJK and Punjab, which was creating difficulties for investors of the Kerote project.

PDO board members agreed that rates offered for government land for the New Bong iniative, a 84-megawatt hydel power project on the Jhelum River in AJK would be replicated for other upcoming projects like Gulpur, Azad Pattan, and Kerote, according to sources. However, in the case of private land the price would be determined by market factors.

Published in The Express Tribune, July 8^th, 2014.