India's NHPC to Develop $1.7 Billion, 1,500-MW Tipaimukh Hydropower Project in Manipur

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Indian Ministry of Power has directed NHPC Limited (Faridabad, Haryana), the country's largest producer of hydropower, to form a joint venture with Satluj Jal Vidyut Nigam Limited (SJVN) (Shimla, Himachal Pradesh) and the state of Manipur for developing the 1,500-megawatt (MW) Tipaimukh hydropower plant in the northeastern state. Investment in the project is estimated to be $1.71 billion. NHPC will hold a 69% stake, while SJVN will hold 26% and Manipur will hold the balance of 5%. NHPC is drafting a Memorandum of Understanding for the venture to be submitted to the government within a month.

The project was first awarded in January 2003 to state-owned North Eastern Electric Power Corporation Limited (NEEPCO) (Shillong, Meghalaya). However, construction did not begin because of delays in obtaining approvals from the forest department. The power ministry's decision to hand over the project to NHPC and its partners reportedly has taken NEEPCO by surprise, as no reasons were given for the sudden change. The Indian government had been planning to enter a 49:51 venture with NEEPCO earlier this year.

While the central government's move is being attributed to NEEPCO's slow progress, the firm is quick to blame the central government for not facilitating clearance from the state's forest department. NEEPCO claims to have obtained statutory clearances from the states of Assam, Manipur and Mizoram, as well as environmental clearance from the central government. Reports also indicate NEEPCO had requested budgetary support from the central government for setting up the Tipaimukh hydropower plant, but was unable to implement the project without financial assistance.

The 1,500-MW Tipaimukh power project involves the development of a 390-meter long and 163-meter high dam over the Barak River, at a location 500 meters downstream from the confluence of the Barak and Tuivai rivers in the Churacchander district, near the border of Manipur and Mizoram. The power project would be one of the largest in northeastern India. NEEPCO had invested $1.05 million to $1.26 million in preparing the detailed project report, which has been approved. NHPC will reimburse the cost of preparation of the report to NEEPCO and will work out the other modalities of the transfer. The project will consist of six units of 250 MW each. About 12% of the power generated would be supplied to the state free of cost. It is estimated that the project would take at least 12 years.

Since its conception in the 1970s, the Tipaimukh project has been mired in internal and external conflicts. The Indian government faced difficulties in pursuing the project because of vehement opposition from the local populace and armed insurgents who dominate the region. The project is expected to result in the submergence of 309 square kilometers of land, which has led to widespread apprehension among the inhabitants of the region. Several national liberation movement groups, who have been demanding full secession of Manipur since the state merged with India in 1949 without public consent, also have accused the India of exploiting the state's natural resources.

India's neighbor, Bangladesh, also opposes the project because of concerns that construction of the dam would affect the flow of water from the Barak River to the country. The Barak River provides for 7% to 8% of the water requirements for Bangladesh. Early last month, the people of Bangladesh staged a massive demonstration before the Indian High Commission Office at Dhaka in opposition to the project. Late last month, a 10-member parliamentary team from Bangladesh arrived in India to visit the project site and launch a five-day survey before construction begins. India's Union Minister of Power, Sushil Kumar Shinde, said the Indian government would not adopt any steps that would harm the interests of its neighbor. Shinde also said that no irrigation project would be developed downstream of the dam, and hence water would not be diverted. He further indicated that the project would instead be beneficial to Bangladesh, as it would help in flood control.

The power ministry's decision to involve NHPC in the project is also being criticized because of the firm's failure to develop the 90-MW Loktak Downstream hydropower project in Manipur during the past 10 years. The project was cleared by the central government in 1999 with an approved cost of more than $146 million. However, it was only in September 2007 that NHPC entered into a Memorandum of Understanding with the state government of Manipur for implementing the project on a venture basis.

With the Tipaimukh project under way, NEEPCO has revised its target for addition of power generation capacity from 4,500 MW to 3,000 MW by the end of the fiscal year 2016-17. NEEPCO currently has a total installed power generation capacity of 1,130 MW. Earlier this month, the firm announced plans to add 800 MW of power generation capacity in the northeast region by 2013. It is expected to commence work by next month on the 110-MW Pare hydropower project in Arunachal Pradesh and a 100-MW gas-based project in Tripura. NEEPCO's 600-MW Kameng hydropower project in Arunachal Pradesh is under construction and scheduled for completion by December 2012.

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