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NHPC's future plans and roadblocks that the company might face- Shri S.K. Garg, Chairman and Managing Director, NHPC

Shri SK Garg is the Chairman and Managing Director of National Hydro Power Corporation of India. He has 36 years of experience in the energy sector including a long stint in Indian Oil Corporation.

We had an opportunity in December 2010 to discuss NHPC's future plans and roadblocks that the company might face. Here are the edited excerpts...

Question: Being the biggest utility in the hydro sector, how is NHPC contributing towards the government's goal of `Power for All', which may go beyond the planned date in 2012?

Answer: NHPC is involved in the establishment and operation of hydropower projects in the central sector on an ownership basis. The company has recently commissioned 120 MW Sewa-II Project in Jammu and Kashmir. With the commissioning of Sewa II, NHPC's total installed capacity has increased to 5,295 MW, with 14 hydropower stations. These hydropower stations include 1,000 MW Indira Sagar Project and 520 MW Omkareshwar Project through NHDC Limited - a subsidiary JV of NHPC with Government of Madhya Pradesh (GoMP). NHPC generates about 17,000 million units, annually and further, it has ambitious plans for capacity addition for the coming years. With 10 projects totalling 4,500 MW under active construction, the company is poised to become a 9,500 MW company, most likely by the year 2013. Besides, the company is actively pursuing clearances from Government of India for several hydro projects with an aggregate capacity of 9,651 MW. Out of these, seven projects with aggregate capacity of 5,965 MW are planned to be implemented by NHPC on its own.

Other projects are planned for implementation through Joint Venture routes. A Joint Venture company has been formed with NHPC (69%), SJVNL (26%) and Govt. of Manipur (5%) as partners for implementation of 1,500 MW Tipaimukh hydroelectric (Multipurpose) Project in Manipur. Another JV company has been formed with Govt. of Manipur (26% equity) for implementation of 66 MW Loktak Downstream hydroelectric project in Manipur. With the approval from Ministry of Power, the decks have also been cleared for the formation of a JV company with NHPC (49%), JKSPDC (49%) and PTC (2%) for implementation of Pakal Dul and other hydroelectric projects, having an aggregate capacity of about 2,120 MW in Chenab river basin in Jammu and Kashmir.

Question: North Eastern region is endowed with the highest hydro potential of around 50,000 MW. In contrast, the power demand in the region is much lower as compared to this potential, which has led to unrest and opposition by the locale. What are your views on the subject and in what way can we overcome this problem?

Answer: NHPC has given the paramount importance to execute and operate its projects in an environment-friendly and socially responsive manner. The company conducts comprehensive Environmental Impact Assessment (EIA) studies, on the basis of which Environment Management Plans (EMP) are prepared to address the concerns of environment conservation. Being a responsible corporate citizen, NHPC is sensitive towards socio-economic and environmental issues and takes initiatives for the betterment of the project affected families in and around its projects and power stations through its CSR-CD plans. Public hearings are organized to address concerns of the local people. The company's Resettlement and Rehabilitation Policy-2007, which has been framed after consultation with various stake holders like international funding agencies, sister CPSUs, displaced persons of NHPC's projects and NGOs, provides for additional benefits over and above those provided in National Rehabilitation and Resettlement Policy-2007. So far, NHPC has not faced any major R&R problem during implementation of its projects.

Question It has been witnessed that NHPC has lost a few projects to private parties owing to high upfront payment and free power to home state. How does the company plan to overcome this problem in view of the situation getting more competitive in the coming years?

Answer: Being the premier hydropower developer in the country, NHPC gets various works concerning development of hydropower projects, which also includes survey and investigation, preparation of pre-feasibility reports and detailed project reports. After submission of reports, it is the prerogative of the concerned state government to entrust the project to any developer for execution. As per agreement between NHPC and various state governments, NHPC completed studies and submitted reports to the state governments for development of various hydropower projects. It is true that some projects for which NHPC did survey and investigation and prepared DPRs have been handed over to other developers for execution. We have raised the issue at appropriate levels. But, I believe that with the beginning of competitive bidding from next year this issue may become irrelevant.

Question NHPC is also venturing into the thermal power domain, what are company's plans in this respect?

Answer: NHPC is foraying into thermal power business through its subsidiary company, NHDC, which has been entrusted with setting up of a 1,320 MW Revapur thermal power project in Khandwa district by GoMP. Another thermal power project of 1,320 MW at Shahpura in Jabalpur district has also been offered to NHDC by GoMP, for which NHDC has given its consent. Besides, NHDC has also been allocated a site by GoMP for a 100 MW Wind Power Project in the Kukru Region of district Betul.

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