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Thursday, March 4, 2010

NHPC Dibang proj may cost Rs 2,500 cr more on delays

State-owned hydro power giant NHPC may face up to Rs 2,500 crore escalation in the cost of its Arunachal Pradesh project as it is nearly two years behind schedule due to pending environmental clearances.

The 3,000 Mw hydel project being developed by NHPC at Dibang in Arunachal Pradesh was originally scheduled to get commissioned by 2017 but delays in necessary clearances have pushed it back by about two years, sources said.

"The project is about two years behind schedule, it was expected to start producing electricity by the end of the XII Plan Period (2012-17)," sources close to the development said, adding that the project can only come up in the XIII Plan Period (2017-22) i.E. About 10 years from now.

It will take about 10 years to complete the project, where nine years will be required for construction and another one for infrastructure development.

NHPC has received techno-economic clearance for the project and is awaiting those for forest and land, after which it would enter the process of tendering and contracting of equipment.

Meanwhile, the delay in environment and forest (E&F) clearance would affect the financials of the project as the cost of execution would go up.

"This (delay) would definitely result in cost over-run. At present, an estimated about six per cent escalation every year is expected," sources said.Going by the thumb rule, generation of each megawatt of hydel power requires an investment of about Rs seven crore, which means that originally the cost of the project was pegged at Rs 21,000 crore.

After the completion of project study, NHPC will take up the matter with the Arunachal Pradesh government and the Ministry of Environment and Forests followed by a public hearing.

The company addresses concerns of the people of the state and considers the opinions of the local population before the project goes to the Cabinet for approval at the time of public hearing.

Land acquisition starts after Cabinet approval and the entire process takes roughly 10 years, sources said.

NHPC, which currently has an installed capacity of about 5,175 Mw is constructing projects of about 4,622 Mw.

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