State on road to becoming a powerhouse

A decade back, Himachal Pradesh had no money for even its 25 per cent equity participation in the 1,500 MW Nathpa-Jakhri hydel project.

A decade back, Himachal Pradesh had no money for even its 25 per cent equity participation in the 1,500 MW Nathpa-Jakhri hydel project. Since then much water has flowed under the bridge. Using its rivers, Himachal is on course to becoming a powerhouse of the country.

If the Nathpa-Jhakri project now yields the state Rs 700 crore every year, its total hydro-power potential is estimated to cross 20,000 MW. Incidentally, the Himachal Pradesh State Electricity Board’s (HPSEB) share is just 467 MW. It’s the private sector and central PSUs like NHPC which are powering this turnaround. Before Nathpa-Jakhri, a Rs 8,200 crore project manned by the Satluj Jal Vidyut Nigam, the state’s total power generation was below 5,000 MW.

Power Minister Vidya Stokes believes “Himachal will be in position to generate 12,110 MW of hydel power by the end of the Eleventh Five Year Plan. For the next 100 years, the state itself will remain surplus. It will also contribute significantly in meeting the country’s energy demand.”

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The state expects an overall investment of Rs 80,000 crore in this sector. Companies like Reliance Energy Ltd, Jai Prakash Hydro, LNJ Bhilwara group and Netherlands-based multinational Brakel Corporation are already bidding for projects. The 23 hydel projects advertised this year for global bidding invited offers from 90 private power producers. This was in addition to the nine projects for which global bids were invited last year. The Bangalore-based GMR group —currently engaged in construction of Delhi international airport — has made the highest bid, offering an upfront premium of Rs 91.18 lakh per MW to get the 180 MW Holi-Bajoli project in Chamba district.

The concept of upfront premium — applicable for projects above 100 MW — has come as a boon for the state in fact. Last month, the Government received Rs 258 crore as 50 per cent advance money from five companies which were allotted six projects in one go. By now, the state has almost earned Rs 730 crore as upfront premium. “The upfront premium has introduced a greater transparency in the bidding process, which earlier involved huge corruption. Still projects below 100 MW capacity are given on a pick-and-choose basis,” says an investor.

In fact, CM Virbhadra Singh has been accused of favouritism in allotting projects. Alleges former CM Prem Kumar Dhumal: “Projects have been allotted in the most arbitrary manner, and through illegal means. We have evidence to substantiate this charge.” Others also question the logic of not requiring that premium be paid upfront in case of projects below 100 MW noting that if firms pay up money in advance they are likely to be more serious about executing projects. Additional Chief Secretary (Power) J P Negi admits that some companies allotted hydel projects through the MoU route did not take serious interest. “There is demand to extend the upfront premium clause to other projects below 100 MW to ensure fair play,” he adds.