Foreign affairs ministry may fund NHPC studies in Myanmar

Foreign affairs ministry may fund NHPC studies in Myanmar

New Delhi: As part of India’s economic diplomacy initiative to engage Myanmar, the ministry of external affairs (MEA) may be willing to underwrite as much as Rs70 crore in expenses to be incurred by state-owned NHPC Ltd on hydrological studies needed to develop two power projects in that country.

One of the projects is the stalled 1,200MW Tamanti hydroelectric power plant and the other is a 620MW project on the Chindwin river, the largest tributary of the Irrawaddy, Myanmar’s key commercial waterway.

Mint had reported on 27 March 2008 about the stalling of plans to develop the Tamanti hydroelectric project, part of India’s efforts to improve diplomatic and economic ties with its eastern neighbour and counter China’s growing influence in Myanmar.

India had hoped to use the economic leverage it would have gained through the project to tap Myanmar’s rich deposits of natural gas. The country has gas reserves of 89.72 trillion cu. ft, of which 18.01 trillion cu. ft can be easily extracted.

“We have submitted our observations and our recommendations to the Myanmar government along with MEA, where we have told them that we need to go for some more detailed studies, which need some extra cost of over Rs60-70 crore," NHPC chairman and managing director S.K. Garg said, “MEA will bear the cost... NHPC is not absorbing the cost."

In September 2008, an in-principle agreement was signed with the government of Myanmar to do the initial preparatory work necessary for detailed project reports on the two proposed power plants. The agreement followed a June 2008 visit by then minister of state for power Jairam Ramesh to Myanmar.

“MEA should offer us a final award, whether we are in or not on further studies on these two projects. Once the green signal comes, then we will go and depute our team," Garg said.

A senior power ministry official, who did not want to be identified, said: “MEA will pay the additional cost. If it is a strategic interest, whoever is interested should pay for it. NHPC is a commercial organization."

Analysts say that since inter-country deals are complex they are best handled between governments rather than commercial entities. “While NHPC will look at it with a commercial point of view, strategic interest has to be weighed by the government," said Shubhranshu Patnaik, an executive director at audit and consultancy firm PricewaterhouseCoopers. “In all such projects, one needs to have an approach based on the country’s future outlook."

Despite repeated attempts, officials at the Myanmar embassy in New Delhi could not be contacted for comment. Questions emailed to Vishnu Prakash, spokesman for MEA, on 28 August remained unanswered.

Tamanti is located in northern Myanmar. Once completed, the project would help control floods and provide water for irrigation. In return,?India?will?get?the bulk?of the electricity generated through proposed transmission links between the two nations. Myanmar has a hydroelectric power potential of 39,720MW and an installed capacity of around 747MW.

India had been trying to get gas from blocks in Myanmar in which ONGC Videsh Ltd, the overseas arm of oil and gas explorer Oil and Natural Gas Corp. Ltd, and gas distributor GAIL (India) Ltd together hold a 30% stake.

However, the Myanmar government decided that the gas from these blocks would be sold to China. “If this is about energy security, one needs to have a long-term strategic view," Patnaik said. “It cannot be a project-to-project approach unlike the way in which China takes a view."