Home / Industry / Infrastructure /  Govt ready to go it alone on border power projects: Piyush Goyal

In line with Prime Minister Narendra Modi’s strategy to accelerate development of infrastructure along the country’s frontier, India will pursue major electricity transmission projects in the states that border China, going it alone if multilateral lending agencies such as the World Bank back out.

The government has decided to proceed without external assistance, power minister Piyush Goyal told reporters on Sunday.

“I think the problem of the World Bank, particularly to the north-east states of Arunachal Pradesh and Sikkim, came to our attention, that they have stopped funding because of various reasons," Goyal told reporters while presenting his ministries’ 100-day report card. Goyal is also in charge of the coal and renewable energy ministries.

“We shall now be implementing these transmission lines without World Bank support in line with the confidence that India is a self-respecting country and cannot be bowed down or cowed down even if any international agency does not fulfil its commitment."

The so-called Comprehensive Scheme for Strengthening of Transmission and Distribution System had earlier plans to strengthen electricity transmission and distribution in the north-eastern region covering the states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura, some of which border China.

The government will now invest 9,877 crore in the north-east region to set up the transmission network, Goyal said. The projects related to Arunachal Pradesh and Sikkim have been cleared by the expenditure finance committee and are awaiting cabinet approval.

State-owned Power Grid Corp. of India Ltd has planned these strategic electricity transmission links to tap the hydropower potential of the north-eastern states.

Multilateral lending agencies have often expressed reluctance to finance infrastructure projects in Indian border areas that abut China, such as Arunachal Pradesh.

In 2009, China had protested the inclusion of a water management project in Arunachal Pradesh, parts of which India’s northern neighbour lays claim to, as part of a $2.9 billion loan that the Asian Development Bank (ADB) had promised India. The row forced ADB to introduce a disclaimer in its project documents that, while stating that it has no position on territorial disputes, effectively discourages applicants from pushing for assistance for projects in disputed areas.

“The World Bank had certain reservations with respect to Arunachal Pradesh and Sikkim. So the government decided to drop Arunachal Pradesh and Sikkim from the proposal," said a senior government official, requesting anonymity.

The north-east region power system improvement project will be placed before the World Bank’s board in early 2015, a New Delhi-based spokeswoman for the World Bank said. “This estimated $425 million project (loan) is in response to a request from the government of India to help improve intra-state transmission network capacity in the states of Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura, as part of a larger government of India composite programme for the North East," she said in an emailed response to queries.

Her response excluded mention of Sikkim and Arunachal Pradesh, the two states that share borders with China.

Mint had reported on 6 August 2013 about the government dropping Arunachal Pradesh and Sikkim from the World Bank loan proposal to avoid running into Chinese objections over multilateral financial aid to projects in the border areas.

In his election campaign, Modi had promised to take a tough stance on protecting India’s borders with China after New Delhi accused Chinese troops of making repeated incursions into Indian territory. Since sweeping to power in May, he has tried to strengthen ties with neighbours Nepal, Bangladesh and Bhutan, countries where heavy investments in infrastructure by rival China fuelled concern that India’s influence will wane in South Asia.

India has also stepped up efforts to develop border infrastructure such as roads and railways. Some of the important projects planned for the region include the 670km east-west corridor, connecting state capitals with a broad gauge railway network and developing a greenfield airport in Itanagar. The development of infrastructure in the North-East is also key to the nation’s so-called Look East policy—a focus on South-East Asia.

“It is understood that the ministry of power and the department of economic affairs, ministry of finance have taken up the matter further, for arrangement of funds through the government of India and the World Bank," said the website of the ministry of development of the north-eastern region. “As per information received from MoP (ministry of power), the World Bank has proposed to provide assistance of $1500 million in three tranches of $500 million each. Accordingly, MoP has desired that transmission and distribution works covered in the DPR may be prioritized to match with the first tranche ($500 million) of the proposed World Bank assistance."

China claims 90,000 sq. km of Indian territory in Arunachal Pradesh and occupies around 38,000 sq. km in Jammu and Kashmir. Also, under a China-Pakistan boundary agreement signed in March 1963, Pakistan illegally ceded 5,180 sq. km of Indian territory in Pakistan-occupied Kashmir to China, according to the foreign ministry.

Separately, Goyal said the government will spend 75,600 crore to supply electricity through separate feeders for agricultural and rural domestic consumption, aimed at providing round-the-clock power to rural households. This outlay also includes expenditure towards the integrated power development initiative which involves strengthening sub-transmission and distribution systems in urban areas.

While 43,000 crore has been earmarked for the Deendayal Upadhyaya Gram Jyoti Yojana for feeder separation, 32,600 crore is the outlay for strengthening sub-transmission and distribution systems, including metering and underground cabling.

“Some issues are low-hanging fruits. If we concentrate on them, we will get results," Goyal said.

Separating electricity feeders is aimed at ensuring that while farmers get the desired amount of electricity, the quality of power, and its availability for households improves. It will also ensure that users are billed, and technical and commercial losses because of theft are reduced. The scheme is aimed at ensuring around 8 hours of quality power supply to agricultural consumers and 24-hour electricity to households.

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