Carbon credits: note says no loss, J-K corporation says didn’t issue it

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Srinagar: Five days after The Indian Express reported that J-K Chief Minister Omar Abdullah is planning to scrap a Memorandum of Understanding (MoU) between the J-K State Power Development Corporation (JKSPDC) and a private consultancy firm, the Directorate of Information on Sunday issued a statement quoting a “non-existent” spokesman of the corporation. It said the “Baglihar Hydro-Electric Project is not eligible for seeking carbon credits under the Kyoto Protocol” besides the “perceived loss to state exchequer is misconceived and the corporation has not referred such operational matters to the state Cabinet”.

JKSPDC managing director Bipul Pathak denied that the corporation had issued any such statement. However, investigations revealed that a top bureaucrat in J-K Power Ministry who is under the scanner had issued the statement on behalf of the corporation.

“We have not issued any such statement. Today is a Sunday, and our offices are closed. How can we issue a statement at all?” asked Pathak. “I have not issued the statement and I do not know who this spokesman of our corporation is. Please check with the Information Department.”

The J-K Information Department director said the statement was issued by Commissioner Secretary, Power, Sandeep Nayak on behalf of the JKSPDC.

However, the question arises: is Nayak eligible to issue a statement on behalf of the JKSPDC while his own role in the scandal is under the scanner? He was managing director of the JKSPDC when it signed the MoU with the private consultancy firm, KEC International, in 2007.

Nayak was not available for comment.

As reported earlier, the MoU had put the state at a serious financial disadvantage by giving away a whopping 50 per cent share in the revenue generated from the trading of carbon credits of the Baglihar project for a decade, and it had also severely undervalued the price in total disregard for the market price. When the MoU was signed, the market price was at 16 Euros per share but the MoU put it at $5.

The power project would generate 22,22,866 carbon credits annually and the credits could be traded to get millions of dollars to the state exchequer. Carbon credits are a part of international emission trading norms. They incentivise companies or countries that emit less carbon. The total annual emissions are capped and the market allocates a monetary value to any shortfall through trading.

The CM was learnt to be personally looking into the matter. Sources revealed the Government was going to initiate a probe to “investigate how and why a senior bureaucrat went ahead and signed the MoU which causes a massive loss to state exchequer without putting it before the Cabinet”.