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NHPC’s Myanmar failure may hit India’s energy security plans

NHPC’s Myanmar failure may hit India’s energy security plans
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First Published: Thu, Mar 27 2008. 01 40 AM IST
Updated: Thu, Mar 27 2008. 01 40 AM IST
National Hydroelectric Power Corp.’s (NHPC) plans to develop a hydropower project in Myanmar have come to a nought, a move that will likely have an impact on India’s efforts to improve its diplomatic as well as economic relationships with its neighbour, which has rich deposits of natural gas, a fuel that India desperately needs.
Three years after submitting a feasibility report, NHPC has expressed its inability to commence work on the 1,200MW hydropower project at Tamanti, that was scheduled to be operational by 2014, because it has too much to do back home.
“The plan has fizzled out. Though there were a lot of discussions after submitting the PFR (project feasibility report), nothing progressed. We were not able to present our case and expedite the matter. The primary reason for this is our national commitments which we are trying to complete,” said a NHPC executive who did not wish to be identified.
The project failure will affect India’s chances of leveraging its infrastructure development efforts in Myanmar to sign long-term contracts for supply of natural gas. It will also hurt its chances of countering the growing influence of China in Myanmar. And it will likely cause New Delhi some embarrassment in early April when a delegation from Myanmar, led by Gen. Maung Aye, the second highest ranking official in the country, comes visiting.
Government officials who did not wish to be named attributed the NHPC failure to the Centre’s inability to actively engage its neighbour, both politically and economically.
Commenting on the delay, Bhaskar K. Mitra, Indian ambassador to Myanmar, said: “You should ask NHPC. They are the one who are supposed to implement the project.”
Queries emailed to the Myanmar embassy in New Delhi went unanswered.
Tamanti is located in the north of Myanmar. Once completed, the project would have helped control floods and provide water for irrigation. In return, India would have received the bulk of the power generated. Myanmar has a hydroelectric power potential of 39,720MW and an installed capacity of around 747MW.
The successful completion of the project could have helped India develop more hydropower projects in that cou-ntry and helped it tap the energy resources there. Myanmar has natural gas reserves of 89.722 trillion cu. ft (tcf), of which 18.012tcf are proven recoverable reserves or gas that can be easily extracted and tapped.
“The Indian government wanted the Tamanti project as leverage to secure hydrocarbon equity for its public sector oil firms in Myanmar,” a gove-rnment official who did not wi-sh to be named said, referring to the gas-for-infrastructure deal India could have struck.
Energy security is a key to sustaining India’s 8%-plus economic growth. The country’s consumption of petroleum products is around 112mt per annum and it imports 78% of its energy needs.
India has also been trying to get some gas from blocks in Myanmar, where ONGC Videsh Ltd and Gas Authority of India Ltd together hold a 30% stake. However, the Myanmar government recently decided that the gas from these blocks would be sold to China. India is likely to try and lobby for reversing the decision.
“Inter-country deals are very complex. It is more government-to-government intervention that helps. Nothing else works. However, NHPC also has a huge issue of project implementation. They have a lot of difficult sites (in India, where they are setting up projects) and it is a challenge to implement them,” said Shubhranshu Patnaik, an executive director at audit firm PricewaterhouseCoopers.
Seven of the 12 projects NHPC is working on have been delayed due to unavailability of manpower and price disputes with private contractors working on the projects, as reported by Mint on 18 January.
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First Published: Thu, Mar 27 2008. 01 40 AM IST