Nine government-owned hydroelectric power projects, most of them spread across India’s North-East, have hit roadblocks due to delays in getting funds totalling Rs32,155 crore that can be disbursed only after securing several government approvals, especially environment and forest clearances.
“Delayed projects (totalling 6,435MW) are a cause for concern. We have to get our act together. Even as there are issues of environment, the government’s decision-making process should be more business like,” said Jairam Ramesh, minister of state for power and commerce. As per the schedule laid down by the government, investment clearance has to be given to a hydropower project within six months from the date of the circulation of the draft public investment board, or PIB, memo along with detailed project report.
Of the stages in the investment decision-making process, most projects are stuck in the sixth one — preparation of the draft note and its circulation for cabinet committee on economic affairs, or CCEA. Projects totalling 6,135MW are pending with the Union power ministry at this stage, where environmental and forest clearance need to be secured.
Though the time frame for such approvals in that stage isn’t supposed to exceed four weeks, North Eastern Electric Power Corp. Ltd’s (Neepco) 1,500MW Tipaimukh project in Manipur has been awaiting the draft note circulation for at least three years.
“Between PIB clearance and circulation of the draft CCEA note, various other clearances such as environment and forest are required... the main issue (for delay) is environment and forest clearances,” said a power ministry official, who asked not to be named.
Anil Razdan, Union power secretary, said the government has written to respective state governments to speed up the process for obtaining environment and forest clearances. “One needs to get the necessary clearances before taking the investment decisions and can not just rush through them,” he added.
A senior official at the ministry of environment and forests (MoEF) noted on condition of anonymity: “Most projects now are in remote states such as Sikkim and Arunachal Pradesh and these are all difficult projects... In environmental clearances, project proponents need to collect primary data, secondary data, satellite images and so on for an environment clearance and that takes time... Environment clearances may be one of the reasons for delayed implementation but, not the only reason.”
Early this year, a power sector review panel headed by Prime Minister Manmohan Singh had observed that “long time was being taken for environment and forest clearances and there was a need to shorten the time frame for grant of the clearance”.
Following this, the government had appointed nodal officers in the ministries of power as well MoEF to expedite these clearances.
Mint had reported on 15 January about the delays in forest and environmental clearances for 30 thermal power projects, with a combined generation capacity of around 22,000MW.
Power sector analysts put the blame on efficiency issues, saying MoEF is acutely short-staffed.
Of the nine hydropower projects awaiting investment decisions, seven projects totalling 4,935MW belong to NHPC Ltd, India’s largest hydropower generation utility. They are Loktak downstream (90MW), Kotli Bhel stage 1A (195MW) , Kotli Bhel stage 1B (320MW), Kotli Bhel stage II (530MW), revised cost estimates of Dulhasti (390MW), Dibang (3,000MW) and revised cost estimates of Kishanganga (300MW). The other project by Neepco, besides Tipaimukh, is Pare (110MW).
“The approval of the revised cost estimates is purely an administrative issue as the projects have already been commissioned,” said the same ministry official.
NHPC chief executive S.K. Garg didn’t respond to phone calls or to the message left on his cellphone.
“There is a need to revamp the entire process. Unfortunately we talk about reforms but not in the government’s decision-making process. If these public sector units are to compete with those in the private sector, they have to get their act together, especially with the investment clearances,” said Anish De, chief executive officer at Mercados Asia, an energy consulting firm.
India has an installed power generation capacity of 143,000MW and plans to add another 78,577MW by 2012. Mint had reported on 28 August that India would achieve only 40-46% of this target. With the country adding only 9,300MW of generation capacity in 2007-08 against a target of 12,000MW, a capacity addition target of 69,277MW is to be achieved in the next four years.
Missing power generation targets isn’t new to India. In the five years to 2007, the country missed its target of adding 41,110MW by 49%.
Power shortages due to limited capacity and growing power theft have been identified as a significant bottleneck that threatens India’s ability to sustain the 9% per annum growth rate recorded in the past two years.
India, which has an installed hydropower capacity of 32,326MW, plans to add another 16,501.17MW by 2012.
Padmaparna Ghosh contributed to this story.