Prime Minister Manmohan Singh kick-started work on the mega 850 MW hydro-electric project on Chenab river as part of efforts to tap the hydroelectric potential in Jammu and Kashmir.

The 850 MW Ratle project, which is the nation's first hydroelectric project that was bid out through tariff-based international competitive bidding, will cost Rs 5,500 crore, Singh said.

"I hope that every effort will be made to complete the project by its scheduled deadline of February 2018," he added. The project was awarded to GVK Power, which offered the lowest tariff for generating power.

As against a potential of generating 14,000 MW from rivers like Chenab, Jhelam and Sindh, only 2,500 MW is currently being generated in Jammu and Kashmir, he said. "Central and state government are trying to harness the remaining potential," he said.

Despite power generation in the state rising to 1,664 MW, J&K continues to be a power-deficit state, he said announcing supply of 150 MW from the central pool to the state.