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Hydropower projects sanctioned in 2006 yet to take off

A number of hydropower projects awarded since 2006 are in the pre-development stages waiting for financial closure and project report clearances

While India continues to battle with the demand and supply scenario in the power sector, there are reports that a number of projects—especially hydropower projects sanctioned since 2006—are still waiting for financial closure, or in some cases even the detailed project report (DRP) clearance.

In 2007, Gammon Infrastructure Pvt Ltd (GIPL) was awarded a 66 megawatt (MW) Sikkim Hydropower project; the company expects to achieve financial closure in 2010. Commenting on the delay, Parvez Umrigar, managing director, GIPL said, “When a hydropower project is awarded, the first step is to submit a DPR. Usually to prepare the DPR we need about 16 to 18 months. Following the DPR submission and acceptance, we go in for land acquisitions and environment clearances from the Union government. These pre-development activities may take up to two years after which one can start work on the ground level.”

There is a different problem with GIPL’s other project, the 60-MW Tidong hydropower project that is waiting for clear guidance on its erection model. GIPL had formed a joint venture for this project in 2007-08 and expects to receive clear guidance from the government over the next two months. “The government is still not sure whether they want the Tidong project to be awarded on a public-private partnership (PPP) basis or on a different contract basis. I expect that on this project, we will have some concrete understanding in the next two months,” said Mr Umrigar.

Similarly, GMR Energy’s 300-MW Alaknanda hydropower project in Uttaranchal, which was awarded in FY06, is waiting for financial closure. According to a company official, the project is likely to achieve financial closure by March 2010. The project is expected to be commissioned by March 2015.

GMR Energy has submitted DPRs for two of its hydropower projects, the 160MW Talong project in Arunachal Pradesh and the 180MW Bajoli Holi project in Himachal Pradesh and is waiting for approval from the Central Electricity Authority (CEA). The company expects to achieve financial closure for the Bajoli Holi project in 2011.

Local issues have also affected some hydropower projects. In May 2008, a GMR Energy-led consortium got a license to develop a 302MW Upper Karnali hydro-electricity project in Nepal. However, last month, the Nepal Maoists have asked the company to halt its work and leave the site saying that the project was heavily in India's interest at the cost of Nepal. GMR Energy expected to achieve financial closure for this project in 2011 and commission it by the end of 2016. However, the Group stated that it is currently committed to completing the project on schedule.

Similarly, Hindustan Construction Co Ltd (HCC) has also lost revenues on its power projects, especially on its Lohari-Nagpala power project in Uttaranchal due to local issues like problems with the Ganga Bachao Aandolan. 

“About 50% of our order backlog is from power projects and most of our projects are running on schedule. The work on the Lohari-Nagpala project has been temporarily suspended sometime in June-July 2009. There is a suspension of this project, but not termination. We would have lost about Rs35 crore-Rs40 crore in the past five–six months due to this suspension,” Vinayak Deshpande, president and chief operating officer (COO) for EPC & construction, HCC had said.

HCC had won this project in 2006, which comprises four units of 150MW each.
According to data available on the CEA website, the generation from hydroelectric power stations in India was 84,495 million units (MU) in 2004-05, which significantly increased to 1,01,293 MU in 2005-06. Later in 2006-07, there was a marginal increase to 1,13,359 MU that rose to 1,23,424 MU in 2007-08.

Although figures for 2008-09 are not available, according to the ministry of power’s website, hydropower generation in India increased by 8.4% during that period.

As of December 2009, India’s overall installed capacity in the hydropower segment was 36,885.4MW from 25,004.3MW in 2000-01. 

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    Shadi Katyal

    1 decade ago

    How much money has been paid for such delay and what will be the final costs

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