Money spinning hydropower projects dreams turn sour, environment gains

Shimla: Having sold out nearly all viable hydropower potential sites on rivers and streams to power companies, both private and government; a sharp drop in per unit electricity sale prices is proving a boon for a battered Himalayan environment as projects are rendered unviable and many companies fail to achieve financial closures.

Since the 1980s, the politicians in Himachal banked heavily to achieve financial self-sufficiency by tapping all available 23,000 MW of power potential but dreams are beginning to sour.

Putting the states plight before the YV Reddy headed 14th Finance Commission, on Tuesday chief minister Virbhadra Singh said that over 95 percent of states power potential had been allotted.

Onetime revenue as ‘upfront premium had been received’, he said. This premium is levied either by a competitive bidding or by way of fixed amounts charged on a per megawatt generation potential for any given site where the state surrendered its rights.

“Sale rate of power Rs 7 per unit, five years ago, had drastically dropped to Rs 2-3 per unit. This has dampened interest of power producers as they are unable to attain financial closure,” said Virbhadra With projected revenues as royalty from power generation evaporating into thin air, he revived a long pending demand for imposition of generation tax.

Only at its last cabinet meeting held on 31st July, the government for lack of interest by entrepreneurs had cancelled allotment of ten small hydro projects that have a total potential of 20.5 MW and involve about Rs 200 Cr of investments.

While the government looks for means to buffer up revenues to meet runaway expenditures on salaries, pensions and interest payments on a mountain of debt, environmentalists have upped the ante, demanding a moratorium on more hydel projects.

Kol Dam project

“Enough is enough. The Uttarakhand disaster is a wakeup call for Himachal Pradesh,” says Ghuman Singh, convener of Himalayan Nithi Abhiyan. “What the government is unable to do, it appears the market forces are proving a saviour of the environment,” he says.

Keen trekker, environmentalist and former senior bureaucrat Avay Shukla says, “There is no such thing as an eco-friendly hydel project in mountain terrain.”

As a one man commission appointed by HP High Court, Shukla had visited all major projects in Saltuj, Beas and Ravi basins. He says, “the largest single contributor to the rape of Himachal’s environment are the hydel projects, and successive BJP and Congress governments since the early nineties have to take the blame for it.”

He adds “they (political parties) have been blinded by the lure of revenues, the discretion, patronage and rent seeking that comes with big money. It is not that they are unaware of the consequences of such massive degradation – there are constant protests from affected villagers, NGOs and even find mention in the reports of various agencies. But the lure of money and the arrogance of power and the ineptitude of the higher bureaucracy have ensured that these concerns are ignored.”

With there being more than 150 big or small projects, operating or under construction, Shukla says that since the 1980s more than 750,000 trees have been felled by hydel projects and their transmission lines in Himachal alone.

With 103 Km of river length of Satluj from Khab, after it enters India from the Tibetan plateau, to Bilaspur expected to disappear into underground tunnels for driving hydropower plants, Shukla questions, “what are we doing to our rivers? Are we converting them all into mythical Saraswatis?”

As Editor, Ravinder Makhaik leads a team of media professionals at Hill Post. Spanning a career of over two decades in mass communication, as a Documentary Filmmaker, TV journalist, Print Media journalist and with Online & Social Media, he brings with him a vast experience. He lives in Shimla.

1 Comment

  • Welcome news, Ravinder,even if the relief for the environment is for the wrong reasons! A follow-up article on the reasons why the purchase rates for power have declined so drastically would be quite revealing. My own personal view is that this is happening because most State Electricity Boards and Discoms are bankrupt and thus unable to buy the power- they prefer to go in for load shedding.Even the Discoms of Delhi( where at the highest slab the per unit rate for the consumer is Rs.7.00) owe thousands of crores to the power producers like NTPC and NHPC who periodically threaten to stop supply before they are told by the Govt. to shut up! Most Electricity Regulatory Commissions are total failures: they simply toe the state govt. line( to whom, of course, their members are obliged for their post retirement sinecures). The push for reform in this sector which had started in the late 1990s under Vajpayee’s govt. has petered out. The fall in industrial growth rate has had its effect also on the demand of power. So its all a combo of ineptitude, sloth, corruption and lack of political will. But this is only a temporary relief for the environment. The real breather for Himachal will come only when some organisation or NGO from Himachal approaches the Green Tribunal to stay all Hydel projects in Himachal just as it has done for Uttarakhand last week. The context, the reasons and the environmental effects and concerns for the two states are identical. Why are these NGOs not taking any action to approach the Tribunal immediately? Merely issuing statements from Kinnaur or Kullu will not do.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.