Don’t scrap Loharinag Pala project

NTPC started work on its 600-mw Loharinag Pala project on the Bhagirathi river in 2005 after securing all statutory approvals, including environmental clearance from the ministry of environment and forests (MoEF). NTPC has already invested Rs 600 crore in the project and implementation work is at an advanced stage. But now the central government is seriously considering scrapping the project, apparently under pressure from the NGOs that have raised fears that the natural flow of the river will slow down because of project execution. As part of the project, long tunnels have already been dug under the hills. If the project is abandoned at this stage, it would pose serious risks to an area that is seismically sensitive. In addition to safety risks, scrapping the project would seriously damage the credibility of the regulatory regime and send out a wrong message to private developers who have shown interest in the hydropower sector. Project developers have complained about the stringent procedures followed by the MoEF for issuing environment clearances. Many projects fail to bag MoEF’s nod and never see the light of the day. But there is little scope for doubting the efficacy of the procedures adopted for issuance of environmental clearances, given that a comprehensive public hearing programme is conducted by the district administrations. The issues and concerns raised during the public hearings are properly documented and taken cognisance of by the MoEF while issuing the clearances. It is surprising why such concerns, if they are creditworthy, were not raised during the hearing for the Loharinag Pala project.

What is even more surprising is that the relevant NGOs and environmentalists did not raise any concerns when the NTPC started implementation work on the project. They appeared on the scene only after NTPC had made a sizeable investment and implementation work was at an advanced stage. This is not the first project being developed on the Bhagirathi river. Hydroelectric plants like Tehri Dam, Maneri Bhali-I and II have also been built on the river. These plants have been operated for a long time without causing similar complications. The Loharinag Pala is a run-of-the-river hydroelectric project. Such projects do not necessitate submergence of a vast tract of land for development like a reservoir-based project.

Capacity addition in hydropower generation has been rather slow. This is because, historically, only a few public sector companies have been active in the sector, while the presence of private players.

is just nominal. When India’s largest thermal power generator NTPC ventured into the sector a few years ago, it raised hopes of expediting the pace of hydropower capacity addition in the country. NTPC has outlined ambitious capacity addition plans in hydropower generation as part of its strategy to diversify away from fossil fuel-based power generation. In fact, the company had approached the government for the allocation of inter-state hydroelectric projects, which are stalled because of litigation between states over water-sharing. It had argued that being a central utility, it was well positioned to undertake implementation of such projects. However, if NTPC is forced to abandon the Loharinag Pala project, it would be a bad experience for the company. This could, in turn, deter the thermal generator from aggressively pursuing opportunities in hydropower generation. If that happens, it would be unfortunate for the country.

Strong support for the project among local people has been demonstrated by the fact that almost all the public representatives from the area have opposed the government’s plan to scrap the project by writing letters to the PM and the Union power minister. This is probably because NTPC had raised hopes of development in the area by taking up the project. Abandoning the project would be a big disappointment for the local population. The state government has already stopped work on two hydropower projects taken up for development on the same river by the Uttarakhand Jal Vidyut Nigam. Significantly, most of the states with hydropower generation potential are economically underdeveloped and lacking in employment opportunities. As a result, people from these states have to migrate to metros for jobs. Now, if these states cannot even harness their hydro resources, hopes of development will dim further.

India has the potential to add 150 gw hydropower generation capacity, of which it has harnessed only 25%. In recent years, the government has taken policy initiatives like allowing developers the flexibility to sell 40% power in the free market to attract private investment to the sector. But there is not much difference on the ground, as private players still find hydropower projects a risky investment. If central public sector companies become risk averse too, capacity addition in hydropower generation just won’t take off.