With ADB loan in hand, Himachal govt set to match other power producers

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HimVani
Shimla: The state government in Himachal Pradesh is set to renew its efforts to play a major role in power production in the state with the Asian Development Bank sanctioning a loan Rs 3,200 crore for the execution of three major power projects.
While it has been the government’s long cherished dream to have more share in electricity produced in the state, with no funds at hand the state has always played a good host to either PSUs like Satluj Jal Vidyut Nigam Limited (SJVN), NHPC, NTPC and later on to private players like the JP Group. Out of the total 6310 MW of hydel potential harnessed so far, only 468 MW has been exploited in the state sector. So while the Bhakra Beas Management Board reaps in the profits from the Satluj-Beas river system, SJVN now is set to monopolize the upper Sutlej basin whereas NHPC has set its base in the Ravi basin. All that the state gets is some free power and lately a minor cost sharing arrangement as in the case of Nathpa-Jhakri project executed by SJVN.
The state’s only major venture, the 126-MW Larji project, executed by the state electricity board turned out to be a major embarrassment for the government following huge time and cost over-runs, and also large-scale financial irregularities leading to the registration of vigilance cases against senior engineers. After this bitter experience, the state decided to form a separate corporation to execute power projects in the state. Initially, three projects – 240-MW Kashang, 100-MW Sainj , 402-MW Shongtong-Karcham projects and the 111-MW Sawra Kuddu projects – to Himachal Power Corporation. But, facing shortage of funds none of these were initiated, but now the state is set to soon get Rs 1700 crore in October as the first installment of the loan for the projects involving an expenditure of 4,500 crore.
It will have to pay back only 10 per cent of the amount (Rs 320 crore) over a long period. The Centre will pay 5.5 per cent interest on the loan but it will be given as a grant to the state. The Centre is giving 90 per cent of the loan amount as a grant under the plan drawn out to make the state self-reliant by exploiting its huge potential for hydel generation.