BHEL excluded from portfolio of world’s largest sovereign fund
A power plant being built through a joint venture between India and Bangladesh could impact the fragile ecosystem of the Sundarbans and impact the health of people in the two countries, a Greenpeace report said.health Updated: May 10, 2017 11:12 IST
Bharat Heavy Electricals Ltd, India’s largest power plant equipment manufacturer and a Maharatna company, has been blacklisted by the largest sovereign fund in the world over environmental concerns.
The company’s biggest international order, the contract to build the Rampal power plant in Bangladesh, was a liability as far as Norges Bank, the central bank of Norway, that manages the fund worth about $900 billion.
On Friday it removed BHEL from its portfolio in view of environmental concerns regarding the Rampal power plant that BHEL is building in Bangladesh.
“The Executive Board in Norges Bank has decided to exclude Bharat Heavy Electricals Ltd from the Government Pension Fund Global. The company is excluded based on an assessment of the risk of severe environmental damage,” the bank said.
“The Council on Ethics finds that there is an unacceptable risk of the company contributing to or being responsible for severe environmental damage,” the statement added.
Officials at the BHEL confirmed that they had been removed from the list because of environmental concerns regarding the Rampal project but said that since BHEL was India’s biggest power plant equipment manufacturer they were still trying to figure out the implications.
A new Greenpeace report found that the 1,320-megawatt power plant being built in close proximity to the Sunderbans could lead to premature deaths of 6,000 people over a 40-year period, including people in the neighbouring Indian state of West Bengal.
Bangladesh has rejected the findings. “We do not take the report into cognizance,” Bangladesh Energy Minister Nasrul Hamid told local news channels this week. “They are doing their job and we are doing our job.”
The plant site in Rampal, Bangladesh is 14 km from the Sundarbans and 65 km from Sundarbans world heritage site. It is a unique ecosystem that supports the largest population of Royal Bengal tigers in India and the endangered Gangetic dolphin. A UNESCO expert committee in 2016 recommended that the project be relocated because of growing concerns about its environmental impact on the Sundarbans.
The power project is a joint collaboration between the Bangladesh Power Development Board (BPDP) and the National Thermal Power Corp (NTPC) under a partnership established in 2012 called the Bangladesh-India Friendship Power Co. Ltd. NTPC will set up and operate the plan. BHEL won the NTPC contract for engineering procurement and construction of the plant.
This is not the first time the plant has come under scrutiny, environmental groups have been up in arms against the plant since its inception.
To feed the plant, nearly 5 million tonnes of coal will be imported along waterways that pass through the Sundarbans. There is a possibility that coal-carrying vehicles could scatter fly ash, coal and dust, sulphur and other harmful emissions, numerous environmental assessments have found, there is a need to account for possible accidents because of manmade and natural factors like tidal waves and cyclones, that are frequent in this region.
Locals have also staged demonstrations against the project over fears that it will impact their livelihoods.
A report last year found that the plant may also face financial risk making it economically unviable. It listed the higher cost of power compared the prevalent prices in Bangladesh and the costs associated with the plant are likely to increase because of opposition from local communities.
The plant is expected to cost $1.7 billion and construction of the power plant is expected to be completed by 2020.