Concerns have emerged regarding the expected return on capital investment.
By Mohinder Verma
JAMMU, Dec 7: Uncertainty still looms over the commencement of work on the Ujh Multipurpose Project in Kathua district, initially proposed several years ago. Officials have voiced apprehensions about the satisfactory return on the capital outlay that the Union Government would be making.
As per official sources, the revised proposal for the Ujh Multipurpose Project was debated during the 148th meeting of the Technical Advisory Committee at the Ministry of Jal Shakti on January 17, 2022, and subsequently approved at an estimated cost of ₹11,907.77 crore.
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The original proposal outlined a completion cost of ₹9,167 crore, projecting irrigation for 76,929 hectares and generating 196 Mega Watts of electricity. However, the updated Detailed Project Report revised the completion cost to ₹11,908 crore as of December 2019, increasing the irrigation coverage to 91,073 hectares but reducing the anticipated power generation to 89.50 Mega Watts.
Once all requirements were fulfilled, the project was submitted to the Public Investment Board (PIB), chaired by the Secretary of Expenditure from the Union Finance Ministry. The PIB is responsible for reviewing and approving projects with a budget exceeding ₹500 crore.
According to sources, “The PIB has expressed concerns regarding the potential return on capital investment for the Ujh Multipurpose Project.” They noted, “The PIB’s assessment is crucial as it ensures that projects are thoroughly evaluated and approved prior to implementation. Additionally, the Board examines proposals for increasing authorized share capital and securing government guarantees for loans from financial institutions.”
Due to the PIB’s recommendations, uncertainty remains regarding when work on the Ujh Multipurpose Project will commence. However, sources indicated that since the project aims to optimize the utilization of Eastern Rivers’ waters allocated to India under the Indus Water Treaty (IWT) by harnessing flows currently entering Pakistan, the Government of India might seek alternatives in response to the PIB’s findings.
While it’s acknowledged that the project may not yield a high return on capital investment, it is anticipated to enhance the socio-economic conditions of the local population, improve agricultural practices, and ultimately boost yields, fostering regional development. Given these benefits, there is a possibility of intervention at the highest levels of the Government of India.
It’s noteworthy that the Multipurpose Project is planned for construction on the Ujh River, one of the primary tributaries of the Tawi River. The dam site is proposed near the village of Barbari, approximately 1.6 kilometers downstream from Panjtirthi, while the powerhouse is expected to be located 9.5 kilometers downstream near the village of Deoli.
If executed, this project would also address the drinking water challenges faced by residents and mitigate the extreme flooding that occurs annually during the monsoon season. Moreover, the project includes potential indirect benefits, such as opportunities for fisheries, tourism, and other progressive developments.
The Detailed Project Report, which was designated as a National project in 2008, was initially crafted by the Indus Basin Organisation of the Central Water Commission (CWC) in 2013 and has undergone multiple revisions since then.
