Companies

Road blocks mar Jindal Power projects in Arunachal

Siddhartha P Saikia New Delhi | Updated on June 03, 2013 Published on June 03, 2013

Funding, regulatory approvals prove tough to obtain

The three hydro power projects of more than 5,000 MW capacity in Arunachal Pradesh, undertaken by Naveen Jindal’s Jindal Power Ltd (JPL), are likely to take at least 10 more years to get commissioned. This is mainly on account of delays in getting regulatory approvals and funding.

The proposed run-of-the-river projects, with envisaged investments of nearly Rs 50,000 crore, include the 3,097 MW Etalin project, the 680 MW Attunli project and the 1,600 MW project at middle Subansiri. These were set up in joint venture with Hydro Power Development Corporation of Arunachal Pradesh Ltd (26 per cent) and Jindal Power Ltd (74 per cent) on a build, own, operate and transfer basis.

Lack of funds

The biggest obstacle for the private firm is that Arunachal Pradesh doesn’t have enough funds to bear the equity investment, said senior company officials working on the projects. The projects are proposed to be funded by 70 per cent debt and 30 per cent equity. Going by this combination, the State will have to fork out Rs 3,900 crore over six-eight years.

Besides, regulatory clearances, including environmental clearance for the Etalin unit, would take at least two more years. Post this, the civil works such as approach roads have to be built. Equipment orders are not likely to be placed before five-six years from now.

Tanga Byaling, Minister for Power (Electrical) and Rural Development of Arunachal Pradesh, said that MoUs were signed with private players for setting up hydro projects a few year back but the projects are not progressing.

“The projects are hanging because companies are not coming forward. The Secretary is reviewing the projects and the companies that do not want to go ahead will be asked to surrender,” he told Business Line, without talking specifically on Jindal’s power projects.

‘Too ambitious’

On December 5, 2012, Sushil Maroo, Deputy Managing Director of Jindal Steel & Power, had said that the first unit in Arunachal Pradesh was likely to be commissioned by 2020. However, company officials working for the hydro projects say that 2020 is “too ambitious.”

According to the Planning Commission, Arunachal Pradesh’s outlay for annual plan is Rs 3,700 crore for 2013-14, which is 4.7 per cent higher than the previous year. The State has signed more than 40 small and mega (more than 500 MW) hydro projects.

The State tried to get funds based on future power sale agreements, but in vain. It has also approached the Planning Commission for possible grant or loans to fund the hydro projects. However, nothing has come its way. Arunachal Pradesh also brought down its equity by 11 per cent by selling shares to Jindal Power. But the Government reversed its decision and now retains a 26 per cent stake.

The Central Electricity Authority has cleared the 3,097 MW Etalin project. The company has applied for forest clearance and other feasibility studies have started.

Land acquisition woes

Jindal Power also faced unique problem when it sought permission for land acquisition. “The State doesn’t have proper land records. It is tough for the district administration to verify who owns the land,” said the company official.

For the 680 MW Attunli project, a detailed project report has been prepared. But, the Central Water Commission wants the dam height to be increased by an additional 15 metres as part of flood control measures. The project developer is not willing to pay for the additional expenditure. siddhartha.s@thehindu.co.in

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Published on June 03, 2013
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