Private developers seek to partner with NHPC on hydropower projects
NHPC had floated bid for forming joint ventures with those developers who have sites awarded to them
New Delhi: Private hydropower developers who were given projects previously awarded to state-owned NHPC Ltd now want to partner with the public sector utility for constructing them.
Jindal Power Ltd, Reliance Energy Ltd and KSK Energy Ventures Ltd, which were awarded the Subansiri Middle (1,600MW), Siyom (Siang Middle 1,000MW) and Subansiri Upper (2,000MW) projects, respectively, have expressed interest in developing these projects jointly with NHPC.
This 4,600MW capacity, enough to cater to the power demands of Delhi, was taken away from NHPC by the Arunachal Pradesh government even after the state-owned utility had done extensive preliminary work on them, which included preparing detailed project reports (DPRs).
Jaiprakash Associates Ltd was given the Siang Lower (2,700MW) project previously awarded to NHPC, but hasn’t expressed similar interest in working with the state utility on developing it, according to three NHPC executives, all of whom declined to be identified.
A Jindal Power spokesperson also confirmed the company’s interest in forming a joint venture with NHPC to develop the Subansiri Middle project awarded to it.
These awards by the state government had invited criticism from the Comptroller and Auditor General of India (CAG). The state government is run by the Congress party, which also heads the ruling United Progressive Alliance (UPA) government at the centre that’s fighting allegations of corruption on coalfield and spectrum allocations.
Executing a hydropower project is a time-consuming and tedious process. It includes a thorough survey and investigation, preparing a detailed project report, relocation and resettlement of the affected population and infrastructure development.
In light of the awards, CAG, the government’s auditor, said the Union power ministry needs to instruct the state government that allocation of such projects above 100MW needs to be fair, transparent and competitive.
The private developers expressed their interest in partnering with NHPC in response to a bid floated by the state-owned utility for forming joint ventures with those developers who have sites awarded to them. Of the four entities that were given projects taken away from NHPC, except for Jaiprakash Associates the other three attended NHPC’s pre-bid conference.
“A pre-bid meeting was held sometime back, which was attended by Reliance Energy, JPL and KSK Energy Ventures. These were the same companies which were earlier awarded our projects. Only Jaiprakash Associates didn’t turn up. Setting up hydropower projects requiring various clearances is not an easy task," one of the NHPC executives mentioned earlier said.
“The joint venture will be a one where NHPC will hold a 51% stake," said the other executive at the firm, who also confirmed the development.
A DPR forms the basis for the execution of capital-intensive projects, which involve relocation and resettlement of project-affected persons and the ability to withstand geological surprises. DPRs involve a substantive investment in time and money, for which NHPC is said to have been compensated. To be sure, no agreement was signed between NHPC and the Arunachal Pradesh government for the execution of these projects.
“Yes, we are interested in developing Kamala project (formerly Middle Subansiri) in joint venture with NHPC," a Jindal Power spokesperson said in an emailed response. “DPR of the project has been submitted to CEA (Central Electricity Authority) in October 2013. Land acquisition and forest clearance processes have been started in 2012 itself, and preparation of EIA (environment impact assessment)/EMP (environmental management plan) is in progress."
Questions emailed to spokespersons of Reliance Energy and KSK Energy Ventures on Wednesday remained unanswered.
“A pre-bid conference was called which saw participation from around seven developers. These three companies were also there. The idea to do a JV is because we are not getting new projects. With money being idle, we can either get into a JV with the private sector or the states," a third NHPC executive said. He, too, requested anonymity. “These developers are unable to develop the project on their own."
NHPC has a generation capacity of 5,702MW. Projects that would generate 3,808.5MW have been delayed by problems such as disputes between states, geological surprises, and resistance from locals, even as no new projects have come NHPC’s way.
The CAG highlighted Arunachal Pradesh’s decision in a report titled Performance Audit on Capacity Expansion in Hydro Power Sector by CPSEs (central public sector enterprises), tabled in Parliament, Mint reported on 9 October 2012.
“Despite specific directions (August 1999) from prime minister’s office (PMO), MoP (ministry of power) did not form special purpose vehicle (SPV) for survey, investigation and implementation of Siang and Subansiri multipurpose projects (six) in the Brahmaputra basin in Arunachal Pradesh," the auditor’s report had said. “Instead GoI (government of India) allocated (May 2000) six projects (20,700MW) to NHPC of which only one project, i.e., Subansiri Lower (2,000MW) is being executed by NHPC."
“Later, government of Arunachal Pradesh allotted (February 2006, August 2009 and March 2010) four of these projects to the private developers/ joint ventures," the report added. “The decision to move from SPV to NHPC and then to private developers only added to the delay in the execution of projects."
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