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Indira Sagar project turns profitable within three months — Work going on ahead of schedule

Raghuvir Srinivasan

The Indira Sagar Dam in Madhya Pradesh. — A.M. Faruqui

Bhopal , July 7

IN a noteworthy achievement, Narmada Hydroelectric Development Corporation (NHDC) has registered a profit in the first three months of the partial commissioning of its power project at Indira Sagar in Madhya Pradesh.

The company posted a profit of Rs 12.37 crore for the January-March 2004 period on a turnover of Rs 30 crore and even managed to pay a dividend of Rs 2.5 crore to its two shareholders.

Mr S.K. Dodeja

NHDC is a 51:49 joint venture between National Hydroelectric Power Corporation and the Government of Madhya Pradesh and is currently implementing a 1,000-MW hydropower project at Indira Sagar on the Narmada river at an estimated cost of Rs 4,300 crore.

The company was able to post profit due to the early commissioning of one-half of the project. "Of the total eight units of 125-MW each, we have already commissioned four, seven months ahead of schedule, and hope to complete the entire project by December this year," said Mr S.K. Dodeja, Chief Executive of the company.

The Indira Sagar dam, with a height of 267 metres, boasts of the largest reservoir in the country with a full submergence of 913 sq. km. The dam is also intended to serve irrigation needs in the region and will be the mother reservoir for other downstream projects such as Omkareshwar, Maheshwar and Sardar Sarovar Dam.

The project was conceived by the Madhya Pradesh Government in the eighties but was handed over to NHPC in 2000 for execution. It was mired in problems of land acquisition, submergence and so on.

The project cost of Rs 4,300 crore was financed by loans of Rs 1,900 crore secured at an interest rate of 7.67 per cent from a consortium of banks, equity of Rs 1,100 crore from the Madhya Pradesh Government and Rs 650 crore from NHPC.

The company managed to shave off Rs 300 crore from the project cost by commissioning the project early and avoiding interest payment during construction.

"Against the Central Government approved tariff of Rs 4.59 per unit, we are now supplying at less than Rs 2 per unit", says Mr Dodeja. This was possible as the plants are operating at higher than the design capacity following availability of good water quantity. Last month, the company supplied power to the Madhya Pradesh State Electricity Board at 98 paise per unit.

The notable feature of the project is that power generation has commenced even before the dam has been full completed. With the walls being raised up to the spillway height of 245 metres, the reservoir can hold water up to that level while the minimum level required to generate power is 237 metres.

At present, the sluice gates are being installed, on completion of which the reservoir can hold water to its maximum capacity of 263 metres.

Meanwhile, the company has commenced implementation of the 520-MW Omkareshwar project downstream. The construction work of the dam has started with diversion of the river and building of the cofferdams.

NHDC had recently completed financial closure of the Rs 2,000-crore project, which will be financed through a Rs 1,500-crore loan jointly from Barclays Bank and UTI Bank and Rs 300-crore of equity each from the State and Central governments. The 14-year loan has been contracted at 5 per cent rate, which Mr Dodeja says is the best rate secured by any such project in India.

The company is now looking to bag a couple of more downstream projects with a capacity of 50-60 MW from the Government and it is also eyeing the 400-MW Maheshwar project originally allotted to the S. Kumar's group but where no progress has been made till now.

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