Hydropower Project approved in Himachal Pradesh

Why in NEWS ?

• The Cabinet Committee on Economic Affairs (CCEA) approved funding to the tune of ₹1,810.56 crore for the 210 megawatt (MW) Luhri hydropower project on the Satluj river in Himachal Pradesh.

About

• The CCEA, chaired by Prime Minister Narendra Modi, approved the investment for the project that is located in Shimla and Kullu districts.
• The project will take 62 months to be completed and will generate 758.20 million units of electricity a year.
• The project will be implemented by the Satluj Jal Vidyut Nigam Limited on the “build-own-operate-maintain” model and would be supported by the Central and State governments.
• Government of India is also supporting this project by providing grants of ₹66.19 crore for enabling infrastructure which has helped in reducing power tariff.
• The clean energy produced by the project will lead to a reduction of 6.1 lakh tonnes of carbon dioxide annually.
• The construction will lead to jobs for around 2,000 people and free electricity worth ₹1,140 crore for Himachal during the 40-year life cycle of the project.
• The project-affected families will be provided with 100 units of free electricity per month for 10 years.

Sutlej River

• It is the longest of the five rivers flowing through Punjab namely Beas, Jhelum, Chenab and Ravi.
• It is a tributary of Indus.
• The waters of Sutlej are allocated to India under Indus Water Treaty.
• The river has several major hydroelectric power points namely Bhakra Dam (1,325 MW), Nathpa Jhakri Dam (1,500 MW) and Karcham Wangtoo Hydroelectric Plant (1,000 MW).

Build-Own-Operate-Maintain Model

• Build Own Operate Maintain is a project financing system used in the construction services where a single contractor is given the responsibility for construction, operation and maintenance of a facility for a specified period prior to handing it over to the client.
• The project owners invite contractors to submit their bids in a transparent tender process.
• The contractors submit their proposals following the specifications provided in the tender document.
• They have to propose the amount for the construction, and maintenance of the facility for the time period specified.
• A number of documents have to be submitted by the bidders that outline the necessary qualifications required to complete the project.
• In a competitive bidding process, the project owner usually awards the contract to the lowest bidder that meets qualifications
• After the contract is awarded, the contractor takes the responsibility of providing all the services from project design to execution.

Cabinet Committee on Economic Affairs (CCEA)

• Article 53 vests the executive power in the hands of President of India. However, the work is not done by the President in-person but de-facto is done by the Prime Minister and its Council of Ministers.
• That does not infer that President is a redundant entity. Article 77(3) provides that to make the executive business efficient and convenient, the President is authorized to make the rules.
• Thus, in 1961, Government of India Transaction of Business Rules(TBR), 1961 came into existence for disposal of Government Business, inter-alia and it finds its constitutionality from the said Article.
• The rules brought by then President Dr. Rajendra Prasad, specify everything about the Cabinet Committees.
• They mention about two sorts of committees- standing and ad-hoc. While, former is of permanent nature, later is temporary. The rules enumerate various Cabinet Committees for different work areas and Cabinet Committee on Economic Affairs (CCEA) is one among them.
• The members in CCEA work on all the matters that come under the ambit of economic field. The mandate to formulate, analyse and review the activities concerned with economic policies stretches out in expansive way.
• The work ranges from as grass-rooted as rural level to foreign investments that require policy making at the highest level.

Composition of the committee

• The composition of the committee varies from time to time. As per TBR 1961, it can constitute members ranging from 3 to 8.
• However, the strength of the members entirely relies on the Appointments Committee of the Cabinet.
• In usual business, the members are from the Cabinet who constitute the committee.
• They add members from different ministries, apart from whom, non-cabinet members as ‘special invitees’ can be added, too.

Appointments

• The members of not only CCEA but other Cabinet Committees are appointed by Appointments Committee of the Cabinet.
• At present, Prime Minister Narendra Modi and Minister of Home Affairs Amit Shah hold the positions.

Aims and objectives of CCEA

• CCEA was made with an aim of reducing the workload from the departments dealing with economic policies.
• In addition to that, it is meant to smoothen the functioning and furthermore provide for an in-depth examination of policies.

Powers and responsibility

• The CCEA is authorised to work in varied spaces in the field of economics. It keeps a check on prices of agricultural products.
• The activities related to small and marginal farmers that may give an impetus to the rural development, are looked upon by the committee too.
• The domain concerned with industrial growth is within the competence of CCEA. In addition to that industrial licensing including licensing for establishment of Joint Sector Undertakings are also within the purview of CCEA.
• It also evaluates the performance of Public Sector Undertakings (PSU) that may include their structural and functional restructuring. As known, if a PSU underperforms, the task of disinvestment including strategic sale and pricing of PSU, are taken up by none other than, CCEA (except to the extent entrusted to an Empowered Group of Ministers).
• It is important to note that the CCEA also priorities public sector investment and considers only specific proposals for investment, the limit of which is revised from time to time.
• The price behaviour, decisions on supply and exports and imports, inter alia, of essential goods are scrutinised by the committee. The price for distributing essential goods in Public Distribution Systems is monitored by CCEA.
• The review of the factual reports from different Departments, Ministries and Agencies is considered in respect of the business allocated to the CCEA.