India's Largest Power Projects Seek Relief from Environmental Roadblocks

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The Indian government has come down on the side of ultra-mega power projects (UMPPs) in the clash between the urgent need to generate additional power and environmental concerns at proposed power plant sites. The government might allow the UMPPs to bypass environmental strictures.

The Cabinet Committee on Investment (CCI), which was set up to fast-track projects with an investment value of more than $160 million, is due to check on two stalled projects with a total investment value of $5.6 billion. The Power Ministry has approached the CCI to exempt the power plants from a key provision in the Forest Act of 1980 that requires companies to identify land for compensatory reforestation.

NHPC Limited's (BSE:533098) (Faridabad) $2.46 billion, 3,000-megawatt (MW) Dibang hydropower project in Arunachal Pradesh and Reliance Power's (BSE:532939) (Mumbai) 4,000-MW UMPP at Tilaiya in Jharkhand are looking for relief from land clearance and forestation rulings.

If approved, the projects could generate an additional 37,000 MW. Currently, hydropower contributes 39,600 MW of the country's 226,000-MW installed capacity. A minimum of 94 hydropower projects are now stalled due to an inability to obtain clearances.

At present, only state-owned companies are exempt from the obligation to earmark funds and land for reforestation. The Power Ministry wants this provision extended to all companies. It has requested that UMPPs pay for reforestation, but that the onus of finding the land should be on the state government.

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