The Never Ending Debate Around Large Hydro Projects

On March 7, the Union Cabinet declared large hydropower projects (LHPs) as a renewable source of power, putting the focus firmly back on a sector that has consistently failed to deliver, going by data.

According to the government, India has a hydro-power potential of 1,45,320 MW, of which only about 45,400 MW has been utilised so far. Only about 10,000 MW of hydro-power has been added in the last 10 years. The share of hydro-power in the total generation capacity has declined from 50.36% in the 1960s to around 13% in 2018-19, the government said in a release.

What the government consistently refuses to address is the reasons why large hydro power has failed, both in its ‘potential’, as well as in actual projects, when they have passed all the hurdles put up by activists against large hydro. And the activists are legion. A legion, fed no doubt by the fears that large hydro projects cause environmental damage, destruction of habitats and livelihoods, a consistent pattern of poor rehabilitation of affected communities, and finally, projects that simply fail to deliver what was promised, be it irrigation potential, power generation or even flood control.

Making one pay heed to the common complaint that hydropower sector has been comprehensively captured by a lobby of contractors focused only on building expensive projects (preferably with state support) and scooting after handing it over to a state undertaking.  We look at the story behind just two states with “massive” hydropower potential, that have failed to realise it today.

It was back in 2004, that the state government of Sikkim signed MOUs for 26 hydro power projects with Independent Power Producers (IPPs) to be built on a 175 km stretch of the Teesta River and its tributary Rangit (Rangeet).

With an agenda of adding at least 4190 MW of capacity from hydro power, the state hoped to earn Rs 1500 crores in revenues annually, after meeting its own requirements of 410 MW.

In a subsequent  development,  the Arunachal Pradesh government also signed 130 Memorandums of Understanding (MOUs) for hydro power development between 2006 to 2009. In both states, the majority of projects were in the Public Private Participation (PPP) mode, with both state governments on call to contribute 11 percent to 26 percent in equity in some of these projects.

The Red Signals

For starters, there was much that was wrong straightaway. For one, the projects required the state governments to stretch their own balance sheets to unrealistic levels by borrowing to meet their contributions where they had made such commitments.

Arunachal in 2012-13 had plans of infusing equity in the tune of Rs 13000 crores in several projects in which it is the equity partner. However in the same year, its entire state budget was Rs 3535 crores only. So other than heavy borrowing, infusion of equity was not realistic.

Then, both states signed much more LHPs than was needed, and mostly by violating the government norms of giving LHPs through International Competitive Bidding (ICB). They preferred to sign Memorandums of Agreement or Understanding (MOU or MOA), instead.

Worse, both states used discretionary powers to allot project sites with the politician-bureaucrat-businessman trio deciding even before formal expert studies could be completed.

Strikingly, both states saw many  Independent Power Producers (IPPs) from totally unrelated businesses and without technical or even in certain cases competent financial background, bidding and actually winning. These include firms like Nagarjuna Fertilisers, Gati Logistics, Bharti Cement and many more.

Finally, after well over ten years, most of these projects remain stillborn, the transmission and road infrastructure  still not good enough to support them, and a number of the project firms at the doors of the National Company Law Tribunal (NCLT), a quasi-judicial body.

Even the ones which survived to see commissioning are facing a tough time financially as the question of viability and sustainability looms large on their future.

Environmental issues ignored, Indigenous people’s voice strangled

“We learnt to our great dismay that absolutely no ecological considerations whatsoever was used in the process of determining the hydropower potential of river basins,” the National Board of Wildlife (NBW) expert committee said in 2013 after a tour of Sikkim’s dam sites.

“We saw with shock the ongoing construction on Teesta III … situated in one of the most ecologically sensitive areas of Sikkim,” said the report, warning of “disastrous consequences” downstream from construction debris.

For several projects in Arunachal too, NBW expressed shock and refused to issue clearances, like for the Dibang multi-purpose project, Subansiri, Athena Demwe and many other projects are still awaiting financial closure, or are facing National Green Tribunal trials.

The Minister for Power, New and Renewable Energy, R.K. Singh had on July 4, 2019 informed the Lok Sabha about these projects in Arunachal Pradesh.

It may be added here that the Central Electricity Authority (CEA) data on stalled or financially languishing projects are not updated, and cost estimations have not been revised. A look into the government power and energy departments of both Arunachal and Sikkim shows this too. There are supposedly live projects in both the states, which find no mention in the CEA list.

Also, there is the predictable lack of transparency in terms of available data on total number of actually live projects irrespective of status, in Sikkim and Arunachal.

Lama Lobsang Gyatso of the Save Mon Region Federation (SMRF) from Tawang District of Arunachal Pradesh highlighted the significance of cultural and religious sentiments, apart from the importance of protecting vulnerable ecology.

“You cannot sell your souls for money and cry saying it is in public interest and for development. There should be a permanent solution to plundering natural resources in the name of hydro power,” said Tseten Tashi Bhutia, convenor of Sikkim Bhutia Lepcha Apex Committee, an apolitical tribal association of Sikkim.

“It is a cultural genocide of minority Buddhist tribals in Sikkim,” adds Bhutia.

With the affected tribes being a minority now, the issue risks further polarisation if proper scientific studies do not support the projects too.