Hydropower – an economic driver
- Part 2 -

N Shyamsundar Singh *

A file photo of Khuga Dam :: Pix - TSE

C. HYDRO POWER DEVELOPMENT

Installation of a small hydro power generating station of 130 kW capacity at Darjeeling during the British regime (1897) marked the beginning of the development of hydro power in India. The State of Manipur also saw its first hydro power plant of two units of 100 kW and 56 kW capacity at Leimakhong in 1930.

In 1962, after 15 years of independence, India could commission Bhakra Hydro Power Plant (Left Bank) – a medium scale power plant having an installed capacity of 450 MW (pre updation). In Manipur, Loktak HE (Multipurpose) Plant having an installed capacity of 105 MW was commissioned in 1984 – precisely 22 years after the Bhakra Plant was commissioned. Since then, inspite of having plenty of potential, the State could not add a single MW of power meaningfully to its generation capacity.

Few State engineers, scientists and experts from Forest Department had burnt lot of midnight oil and obtained the statutory clearances of the Loktak Down Stream HE Project (2x30 MW) and the Tipaimukh HE (Multi) Project (6x250 MW) from various Ministries of Government of India in early nineties and 2003 respectively. They did their part of the job and delivered the things to the concerned authorities with the request to let the projects see the light of the day. There was no much lagging. However, lack of determination on the part of public leaders has caused inordinate delay in execution of the projects.

C.1 Performance in the Developmental Race

The progress of development of Hydro Power in the State, is abysmal and the corresponding delay shall definitely invite both the time overrun and the cost overrun. Above all, the socio-economic development will also be delayed. Rather, the lagging of the State behind others in the developmental race shall widen.

C.2 Development Strategies

Planning Commission has already evolved many development strategies.

o Inclusive Growth : Any kind of development that assumes inclusive growth shall have several components and logistics which can give a much needed boost to the social growth, economic growth and cultural growth of all communities in the area. Besides good roads, reliable power supply and regular water supply, the project colonies where people from different communities and profession stay, normally have such other facilities as required in day to day life of each individual. For instance, school, play ground, health care centre, community hall, bank, post office and market complex, are also available as logistics in most of the project sites. These facilities eventually create avenues for propagating love and affection among the communities residing in the project area. Gradually, the social growth, economic growth and cultural growth also take place.

Thus, Hydro Power development always comes up alongwith other multiple development programmes that fetch different forms of benefits for the general public. It definitely satisfies the criteria the inclusive growth is looking for.

o Sustainable Development : One needs to make sure that one's development work does not cause any kind of harm or damage to the environment and its biodiversity. Protection and management of environment must be given the same importance as given to the work..

In case of hydro power development, apart from the technical and financial reports, two more reports namely Environmental Impact Assessment (EIA) and Environmental Management Plant (EMP) are also prepared and all of them form an integral part of the Detailed Project Report (DPR). EIA report gives the details of the Forest and Environment in and around the catchment area that are likely to be affected by the project while EMP incorporates the details of financial implications in the development and management of the forest and environment. The project cost consists of a substantial amount of money required for Compensatory Afforestation, Rehabilitation & Resettlement of affected villagers and Catchment Area Treatment etc. of the project. Thus, the hydro power project bears the expenditure involved in the sustainable development.

In Manipur, the Forest (so also the environment) has already degraded as a result of mass deforestation and extensive encroachment. Many lakes and water bodies have disappeared over the last few decades. Even the Loktak lake which receives threats constantly from encroachers might have faced the same fate had the Loktak HE Project been not there. The surrounding hills also have very less productive forest; whatever available is either degraded or critically degraded.

Therefore, the basic question is whether the environment shall be maintained with project or without project. The answer is that without project, the degradation has already taken place unabated, it is an-open-for-all case and perhaps no authority has so far come to the rescue of the forest & environment. With project, general public can be motivated and made aware of the merits & demerits of large scale deforestation and damage control mechanism may be designed and adopted; and for that financial support is also available. Therefore, the bottom line is that hydro power development is always associated with sustainable development.

C.3 Determination – a Pre-requisite

Strong determination of the public leaders is a critical to the development of all kinds of resources including hydro power. Secondly, the State also has to create a congenial environment that is conducive for all kinds of construction activities. Perhaps, these have been terribly missing in the State.

C.4 Resource Mobilization :

Being a special category State, Manipur every year receives from the Government of India, the Normal Plan Assistance of which 90 p.c. is grant and 10 p.c. is loan, for the development of all sectors. The Central Government also releases sometimes Special Plan Assistance and other project specific assistance on the re-commendation of the Finance Commission. However, Electricity Industry is the most capital intensive. Therefore, the financial assistance provided by the Central Government is not adequate to fund any kind of medium scale project. Moreover, the State has got many other priorities. Therefore, there is always a need for the State to find out a bonafide investor or developer for the hydro power projects.

o Viability Gap Funding (VGF)

Realising the financial difficulties faced by the resource crunch States, the Central Government has come out with a relief mechanism in the form of a "Viability Gap Funding" for the infrastructure projects. Power development, being an infrastructure project, is provided with VGF upto 20 p.c. of the total project cost. The State can avail the facility for its projects provided it fulfils the criteria for assessing the economic importance of the project.

o Public Private Partnership (PPP mode)

The Planning Commission, Government of India has also formulated another policy for developing the capital intensive projects like Hydro Power Development under Public Private Partnership (PPP mode), with a view to utilizing Private Property for Public good. The joint venture is intended for speedy implementation of the projects.

C.5 Attraction of Investments :

Capital is scarce enough. Therefore, the Electricity Act, 2003, the National Electricity Policy and the Tariff Policy critically emphasize the need for the Licensee to "Ensure financial viability of the Sector and attract investments". The promoter and the licensee shall note down this point very carefully simply because, they are responsible for creating the avenue where the developers and investors can be attracted. Before the financial closer, the developer or the investor shall definitely be interested first to ascertain that the financial health of the State in general and that of the distribution licensee in particular are encouraging and resultant risk is within negotiable level.

In simple terms, the financial health of the State needs to be improved by promoting transparency, consistency and efficiency in delivery of the things. More importantly, the licensee (Electricity Department) needs to acquire the character of an industrial enterprise having business & commercial motive, not merely of a public utility.

D. CONCLUSION

1. It is an established fact that no major economic transformation has been possible without perceptible contributions made by industrial sector. Therefore, the State of Manipur must have suitable Industries.

2. Electricity Industry is the only technically and commercially viable industry for a land locked State like Manipur. It can not only support the economy of the State but also ensure energy security. Therefore, the State must prepare itself to embark upon a long term Power Plan by developing the hydro power resources in phased manner.

3. The ultimate choice enjoys the support of the natural resources and the imperatives of the national initiatives.

4. For achieving the goal, the following are other pre-requisites.

(i) Strong determination and commitment of the public leaders.

(ii) The State Department holding the charge of Power Sector to acquire the character of a competitive industrial enterprise having business and commercial motive, not merely of a public utility.

(iii) Assured social and administrative commitment to peace and co-operation of all kinds.

Concluded ..