Disputes with contractors, staff exodus affect NHPC projects

Disputes with contractors, staff exodus affect NHPC projects
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First Published: Thu, Jan 17 2008. 11 59 PM IST

Short circuit: A view of the Tehri Hydro Project. With several hydro projects being delayed, the country has met a little less than half the target of 14,393MW set for hydropower generation in the 10t
Short circuit: A view of the Tehri Hydro Project. With several hydro projects being delayed, the country has met a little less than half the target of 14,393MW set for hydropower generation in the 10t
Updated: Thu, Jan 17 2008. 11 59 PM IST
The plans of National Hydroelectric Power Corp. Ltd, or NHPC, India’s largest hydropower company, to take its capacity to 10,000MW by 2012 may come unstuck, with seven of its 12 projects being delayed due to a depletion of skilled personnel and rate disputes with private contractors.
Short circuit: A view of the Tehri Hydro Project. With several hydro projects being delayed, the country has met a little less than half the target of 14,393MW set for hydropower generation in the 10th Plan.
A senior NHPC executive, who did not wish to be identified, said: “All projects are going haywire and the 10,000MW target by 2012 is not possible. Contractor issues coupled with manpower problems have led to this.”
The company has also been affected by an exodus of employees, largely engineers, to private sector power firms such as the Reliance Anil Dhirubhai Ambani Group’s Reliance Energy Ltd, Lanco Infratech Ltd and DS Constructions Ltd as reported by Mint on 28 August.
“The are very few major contracting companies for the hydropower projects in the country,” the executive said.
NHPC is currently engaged in the building of 12 projects with a total capacity of 5,322MW. It ended 2006-07 with a net profit of Rs925 crore on revenues of Rs1,963 crore.
Projects such as Parbati-II (800MW), Parbati-III (520MW), Sewa-II (120MW), Teesta-III (132MW), Subanasiri Lower (2,000MW), Uri-II (240MW) and Chamera-III (231MW) have been delayed. While Parbati-II and Subanasiri Lower are delayed by three years and two years, respectively, others are delayed by a year. These projects were expected to contribute three-quarters of the planned capacity.
“The work on three of our projects, at Teesta-IV (160MW), Nimoo Bazgo (45MW) and Chutak (44MW), have recently started and I am not sure whether they will be commissioned on time,” the NHPC executive added.
On an average, it takes around five years to execute a hydro project after it is cleared for construction. Hydropower projects are more complex to build, and need specialized technology and design compared with thermal power ­projects.
NHPC has plans to tap the capital market through its initial public offering to raise Rs1,700 crore.
Industry analysts said that NHPC’s plans were too ambitious as the company has commissioned only 4,200MW in 32 years of its existence. It has added 1,917MW during the 10th Plan (2002-07).
“We are aware about the problems and are looking into them,” said a senior power ministry official, who did not wish to be identified.
Of the country’s 135,000MW power generation capacity, only 32,000MW is hydropower. India is seeking to add 78,577MW of generating capacity in the next five years, with 16,553MW of it expected to come from hydro projects. Public sector units such as NHPC, North Eastern Electric Power Co. Ltd, Satluj Jal Vidyut Nigam Ltd, Tehri Hydro Development Co. Ltd and NTPC Ltd are expected to contirbute to a major part of that.
R.V. Shahi, a former power secretary, said: “Hydroelectric power project development companies claim that they invariably face geographical surprises (such as floods and landslides). The problem has been compounded by the lack of civil construction work agencies. The few companies which are there have already been busy with a lot of other projects. There is a lack of competition in this space.”
Some of the major contracting companies in India include Patel Engineering Ltd, Jaiprakash Associates Ltd, Hindustan Construction Co. Ltd and Gammon India Ltd.
Several hydro projects have been delayed and India has met a little less than half the target of 14,393MW set for hydropower generation in the 10th Plan. In April, a study by the parliamentary standing committee on energy showed the increase in project costs due to delays varied from 400% to 2,500%.
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First Published: Thu, Jan 17 2008. 11 59 PM IST