Loktak Down Stream HE Project (2x33MW)
A need based project -Still cost effective

N. Shyamsundar Singh *

The cost of generation of the Loktak Down Stream Hydro Electric (HE) Project was about Rs. 2.00 per unit only when it was accorded Techno Economic Clearance by the Central Electricity Authority (CEA), Ministry of Power, Government of India in early 1993.

To-day, almost 25 years down the line, the production cost/sale rate at the station Bus stands at well over Rs. 6 per unit and it is not unusual. Primarily, time over run and its consequent cost over run have caused unwanted increase in the cost of generation of the protracted project.

Therefore, the proven fact is that the more the delay is, the more is the capital investment and hence the production cost too. However, the project authorities may once again carry out in-depth studies on the project funding pattern and the financial analysis of the project and find out if the present production cost can be brought down to a level of about Rs. 5 per unit.

The studies shall cover among others the identification of some of the activities in which the expenditure may possibly be reduced and subsequent deduction of the reduced amount from the estimated cost. Further consideration in the light of the following facts shall perhaps show that the generation project is still cost effective and the need base project deserves early implementation.

(i) In eighties and early nineties, the beneficiary states including Manipur used to purchase power from the present Loktak HE project (3x35MW) at a price less than one rupee per unit. Similarly, the state also purchased its allocated share of power from Kopili and Khandong HE projects of Meghalaya at almost the same rate during those years. To-day, the prices are around Rs.4 per unit and consumers accept it.

(ii) The Annual State Plan Size, both Plan and Non Plan provisions inclusive, was a little over Rupees one thousand only in those plan periods. Today, the Five Year Plan Size is estimated at Rs.33,000 crores. Of course, adequacy is a different issue.

(iii) Innovations of new technologies and its application on the enhancement of various sectorial developments have called for more resource mobilization and investments in all the sectors. The economic planners have also identified the Infrastructure, Agriculture and Industries as the priority sectors that deserve special emphasis.

Therefore, with a view to achieving the desired goal within a stipulated time, the decision makers have perhaps made a deliberate attempt to indulge in an excessive issue of fiduciary money and collect substantial revenue. Ultimately, inflation has gained momentum and as a result, the prices of all kinds of commodities have gone up. Impact is more on the imported items like petroleum products, coal and lithium etc.

The employers are also constrained to increase the wages of the employees substantially so that they are also equally equipped with the buying power. The production cost increases and the cost of living index also rises with inflation. Energy generation is no exception as it has a direct bearing with the price hike in other essential items including employee cost /wage.

(iv) In 1973, the total monthly salary of a regular Assistant Engineer was a little over four hundred rupees. The officers of other departments of the state government holding analogous posts also enjoyed similar emoluments. To-day, these officers enjoy almost hundred times the earlier figure. Definitely, there is a valid reason behind the increase. This is a simple example, there are many more.

(v) A global study has already warned that the climate change (Global Warming) will affect India’s North East the most in the world in coming decades. Understandably, it implies that the demand for energy in the state shall increase by manifold in those days when majority of consumers ask for more power to meet the requirements for large scale air conditioning, refrigeration, battery charging for electric operated automobiles, water supply and irrigation etc. besides domestic & industrial requirements.

The state shall find it very difficult to purchase the required quantum of power from other outside source/grid at huge price that includes transmission charge. Availability will also be a big question because other states shall also face the same or more severe power scarcity problem at that time. Therefore, it is always a wise proposition that the states own resource is developed in time on a need base and the purchase from outside at a comparatively high price is avoided.

(vi) The fast depletion of the known reserve of fossil fuels and natural gas on one hand and the need for reduction of carbon emission to combat climate change on the other, have urged the scientists, engineers and technologists of the country to evolve a new paradigm of the energy generation strategy. The new trend has its aim at the development of Renewable Energy(RE) Technologies for generation of electricity at a large scale. Perhaps, the decision makers and planners of this state are also aware of the challenges ahead that pose a real threat to the energy security of future generation.

Extensive studies have been done by reputed authorities to find out an economic area specific option out of the Resources available in different parts of country. The studies carried out by National Institute of Solar Energy (NISE) have shown that solar energy potential in NE Region is relatively less due to clouds and length of the day. Precisely. Manipur has a total of about 122 sunshine days only in a year.

Therefore, with this kind of system, the state may not be able to manage and meet the rapidly growing demand. Wind Energy is also not a suitable choice for Manipur as both the speed and density of wind are not adequate and dependable. Notably, Hydro Electric Power Potential is also a renewable energy source. The State of Manipur is endowed with huge hydro power potential of more than 2000MW in its lakes and rivers. The Loktak Down Stream HE Project is one of such potential sites. Therefore, it must be implemented as a need base power project.

(vii) Another basic question which needs threadbare discussion is whether the environment shall be maintained with project or without project. The simple answer is that, without project deterioration has already begun, it is an open and free for all case and perhaps no authority has so far come to the rescue of the forest and environment.

With project, the general public can be motivated and made aware of the merits and demerits of large scale deforestation. The damage control mechanism may be designed and adopted, and for that financial support is also available. Therefore, what is needed most, is to strike balance between environment and development in a such a way that the damage is controlled, loss is compensated and the benefit is maximized.

(viii) 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 hydro power plant 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 the criteria of sustainable development and inclusive growth are always fulfilled by the hydro power development. Loktak Down HE project shall also contribute the same to the society.

(ix) The generation, transmission and distribution of electricity at a large scale for sale to different load centres with the help of existing power market, have already assumed the role of a big industry. Power industry also provides adequate support to the other industries like Tourism, Pharmaceutical and Sports etc for which the state of Manipur has fairly enough potential. Therefore, Hydro Electric Power industry is a must for Manipur. Solar Power or Wind Power shall never provide these opportunities for the people of the state.

(x) The state shall need quite a large amount of money if it has to develop the additionalities mentioned above separately. The other aspects that can be looked into, with a view to reducing the generation cost of the project are also given below:

a) A couple of months ago, many a number of report on cutting and destroying Ganja & Opium plants that grow over several hundreds of acres of land in the hill districts of Manipur, appeared in the Local Dailies. These reports were furnished formally by the District Authorities. The state government has been reportedly contemplating to develop suitable kind of forests in those non forest areas keeping in view the vital need for protection of environment and ecology for that area in particular and for the state in general. This kind of plantation may be treated as a part of the Compensatory Afforestation programme associated with the Hydro Power Development. The arrangement shall provide much relief to the project and help reduce the production cost.

b) A few years ago, Shri Jarnail Singh IAS, when he was the Chief Secretary of Manipur, then a Special Category State, made a proposal for reduction of return on equity from 16 p.c. to 12 p.c. for LDS HE Project considering the poor economic condition of the people of NE states and also the additional expenditure being incurred in the project because of geographical constraints. Shri Singh pursued the matter with the Ministry of Power, GOI. The Ministry appreciated the proposal and agreed to bring down the generation cost at affordable level. However , it could not be materialized as the project failed to take off within a specified period. To-day the economic condition remains as it was, even though the tag (Special Category State) is removed. Therefore, a similar proposal may be made for re-consideration.

c) The Nungleiband HE Project (3x25MW) is another potential site located at about 12 km down stream of the existing Power House of Loktak HE Plant. The head available between the level at the tail race of existing power house and the level at the proposed dam site across the Leimatak River at Nungleiband is sufficient enough to develop another run of the river power project of 75MW installed capacity. The proposed project shall not pose any kind of problem or harm to the LDS HE Project components.

The project authorities may easily do away with the question of economic viability of LDS HE Project if Nungleiband HE Project is also developed almost simultaneously with LDS HE Project. The simple reason how such an economic solution can stand at ease is that the project may use jointly many common components like project colony, approach road, stock yard, construction equipment, construction power arrangement, and Electricity & Water Supplies etc. in the common interest.

This arrangement shall enable the project authorities to save a substantial amount and bring down the project costs considerably. Finally the economic viability for both the projects shall easily be established. Therefore, the possibility of developing both the projects in a phased manner may also be explored.

It is really unfortunate that the project authorities have already wasted a lot of valuable time and money without making a single meaningful stride towards the goal. At the same time it is also important to note that mere updation of the estimated costs would not let the generation project see the light of the day. Rather, it would only show that the generation cost increases. Therefore, the need of the hour are precisely strong determination, absolute sincerity and assertive move towards a pragmatic way leading to the goal, on the part of the authorities.

Lastly, it is needless to say that any other new power project, be it solar power, or wind power or hydropower, shall produce power at the similar rate as that of the Loktak Down Stream HE Project. The emerging power scenario in the country calls for large scale development of hydropower resource in those areas where there is exploitable potential.

Manipur has plenty of renewable hydropower resource. Therefore the state needs to be proactive and prepared to undertake hydro generation projects under a long term plan beginning with LDS HE Project in the larger interest of the future generation of Manipur.