New Delhi: India’s government is looking at ways in which it can help private sector firms here tap opportunities in hydropower generation in Bhutan, marking a change in the country’s traditional approach of using state-owned companies to push its economic diplomacy agenda, especially among its South Asian neighbours.
As an additional benefit, India, which needs power to feed the needs of a growing economy, will get most of the 8,940MW generated from the five proposed hydropower projects that are part of this push.
“The government has started consultations to discuss ways and means to help private companies get projects in Bhutan,” said a Union government official who did not wish to be identified.
The companies likely to benefit from this move are Reliance Energy Ltd, GMR Infrastructure Ltd, DS Constructions Pvt. Ltd, Jaiprakash Associates Ltd, and a few others.
The projects in Bhutan that are under consideration include Wangchu (900MW), Bunakha (180MW), Sankosh (4,060MW), Punatsangchu-II (1,000MW) and Manas (2,800MW).
While a Reliance Energy spokesperson declined comment on the issue, Manoj Gaur, executive chairman, Jaiprakash Associates, said: “It is a very important development and we welcome it. India needs power and we, as a country and group, have a long-standing relationship with Bhutan. The (involvement of the) government will definitely help the private project developers. We were engaged in the construction of the Tala project there.”
India and Bhutan have already signed an agreement in July 2006, where they agreed to facilitate, encourage and promote development and construction of hydropower projects and associated transmission systems, as well as trade in electricity.
“We have a memorandum of understanding (MoU) with Bhutan to import 5,000MW of power by 2020. We are already importing 1,400MW, and another 1,000MW is under construction in Bhutan,” Jairam Ramesh, minister of state at India’s power ministry, said.
While Bhutan is estimated to have a potential to generate 30,000MW of hydropower, it has an installed capacity of only 1,490MW. The major river systems in Bhutan are Torsa, Wangchu, Sankosh and Manas.
“Since the public sector units (PSUs) already have a huge work commitment in India, this option is being explored,” said another government official who did not wish to be identified.
However, an executive at NHPC Ltd, India’s largest hydropower company, said the government’s approach would hurt state-owned firms such as NHPC.
“We have already prepared the detailed project report (DPR) for 360MW Mangdechu project in Nepal, which we will be submitting within the next 18-20 days. We are very hopeful that we will be awarded this project. The PSUs are competent enough. By adopting this new approach, you are weakening them,” added the executive, who did not wish to be identified.
India has hydropower generation capacity of 32,000MW and plans to add another 16,553MW capacity by 2012. Of this, 35%, or 5,800MW, is expected to be added by NHPC. However, the company has commissioned only 4,200MW in 32 years of its existence, and seven of the 12 projects it 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.
“The Indian government’s focus on Bhutan is misplaced. The focus should primarily be on Nepal. The floodings in Bihar primarily happen due to (there being) no dams in Nepal. If we are able to quickly form our Nepal plan before the new government assumes charge there, we will also be able to check China’s growing presence there,” said Harsh Shrivastava, vice-president, marketing, with infrastructure consulting firm Feedback Ventures.
The Indian government also plans to undertake the building of several commercially unviable hydel projects in Tajikistan as part of its efforts to gain a strategic toehold in a country that is the gateway to other central Asian countries rich in hydrocarbon reserves.
Energy security is a key to sustaining India’s 8%-plus economic growth. The country’s consumption of petroleum products is around 112 million tonnes per annum and it imports 78% of its energy needs.