Efforts are underway to hand over the 400 MW Maheshwar hydel project -- the first privately promoted one in Madhya Pradesh -- to a government public sector unit (PSU).
The only glitch is that no PSU is willing to take over the project, which is being seen as unviable, according to a source familiar with the development.
Promoted by the MW Corp (erstwhile S Kumars), the project that was launched in 1992 has been stuck due to incomplete relief and rehabilitation (R&R) work of the people displaced by the construction of the dam on the Narmada river.
The state government has made its stance clear during the recent hearing by National Green Tribunal (NGT). “The counsel for the MP Power Management Company Ltd (MPPMCL) submitted that the promoter is no longer concerned with the project, and the Power Finance Corporation (PFC) has held a meeting with all the lenders wherein it was decided that since the scenario one has failed, a government PSU will take over the project,” the official said.
In October 2014, a state government committee headed by the additional chief secretary, Ajay Nath had recommended three options that included the infusion of fresh funds, government PSU taking over the project, and cancellation of the power purchase agreement.
However, no government PSU has shown any interest in the project. “The project has become unviable. The main problem is relief and rehabilitation work. The project would require at least Rs 2,000 crore capital infusion, half of which would go to rehabilitation,” a NHPC official said on condition of anonymity.
When the project was launched in 1993, the projected power tariff was Rs 2.64 a unit. After the prolonged delay, the project cost is being estimated at Rs 6,800 crore -- a fourfold rise over what was originally envisaged.
Even as the promoters have claimed that it has arranged $150 million as equity from an international investment firm, which is to be used for completion of rehabilitation, the government has said that no funds have been received.
1992: Project was awarded to S Kumar Limited
2011: Three turbines readied for generation after prolonged delay
2012: The NGT allows the MP government to fill the Maheshwar dam up to a height of 154 metres
2012: Narmada Bachao Andolan (NBA) files an appeal, says company flouted R&R criteria
2012: MP Government sends notice to cancel PPA
2014: Government committee for bailing out project formed
2015: Company claimed to have arranged equity of US $150 million but government denies
2015: NGT says dam gates can’t be closed until R&R complete
2015: Lenders led by PFC recommend project taken up by a PSU