Shimla: Falling electricity prices and high costs with long gestation periods rendering many hydropower projects unviable are deterring power producers from entering the hydro sector even as the Himachal cabinet today pitched a mega 960 MW project to Reliance Energy, an Anil Ambani company, to take up.
The cabinet decided to allot the contentious and controversial 960 MW Jhangi-Thopan-Powari hydropower project on River Satluj to Reliance Engery.
Without providing any details the cabinet release stated that if Reliance Energy did not accept the government terms of project allotment, it may be advertised afresh for bidding.
The Jhangi-Thopan-Powari has been offered to Reliance Energy after it has failed to get many bidders for the project. The project was advertised and re-advertised atleast three times but barring one or two bids, no power producer company came forward to participate in the process.
This mega project which was earlier allotted to Brakel Inc, a Dutch joint venture company in December 2006 after it came out winner in global bidding by offering to pay Rs 36 lakh per MW but was cancelled after a prolonged litigation between the winner and Reliance Energy that was triggered by a change in design after the bidding process was over.
Brakel Inc was backed by Adani Group and had even paid up Rs 193 Crore as upfront money to comply by the project allotment terms. After the project was cancelled, the government had even forfeited the upfront money paid by Brakel Inc.
This project is proposed to be constructed upstream of 1000 MW Karcham project in extremely difficult topography and the fragile zone of Kinnaur.