In a major development, a consortium led by Power Finance Corporation (PFC) has decided to take over the Maheshwar hydel project, which has been stuck for the past many years due to delay in relief and rehabilitation of project affected people.
A consortium of lenders led by PFC and other public sector companies has infused about Rs 2,500 crore in the project and hold majority equity.
“The PFC board, which met on December 17, has decided to take over the Maheshwar hydel project from the promoters who are minority shareholders,” a person familiar with the development said. “The PFC and other state institutions together hold about 74% equity in SMHPCL (Shree Maheshwar Hydel Power Corporation Ltd) the company which is developing the project,” he said.
When contacted, PFC executive director (ED), A Chakravarty, refused to confirm or deny the news. A mail sent to the company remained unanswered.
Established in 1993 and promoted by MW Corp (erstwhile S Kumars), the 400-Mw hydel project on Narmada has been in controversy since inception. Narmada Bachao Andolan (NBA) has time and again held demonstrations and tried to stop work at the dam site. The NGO has also been asking for a re-survey of the proposed submergence. As many as 9,000 families would be affected; however, hundreds of villagers have already been rehabilitated in new settlements. But the R&R work has been halted since 2011 as the company failed to infuse fresh funds.
Even as three turbines are ready, power generation cannot start until dam height is raised. The National Green Tribunal (NGT) has removed its earlier stay on raising the dam height and permitted the company to raise the dam height gradually while ensuring that villagers being affected due to submergence are simultaneously rehabilitated.
“PFC will also release funds for pending salary dues and also to restore power and water supplies and ensure security at the site. PFC and other members of the consortium will now have to infuse at least Rs 1,500 crore to complete the R&R and to restart the project,” the source said.
According to Central Electricity Authority (CEA), the Maheshwar hydel project has been delayed by 14 years due to cash flow issues and inability to pay project affected people for rehabilitation.
1993: Hydel project at Maheshwar, 120 km from Indore, awarded to erstwhile S Kumars Ltd
Over the years, Narmada Bachao Andolan (NBA) has opposed the project, approached MoEF on the submergence that the project would cause.
2010: MoEF orders stoppages of work until further orders
2011: MoEF allows work to resume on the site
Three turbines are ready for generation but cannot be commissioned until dam height is raised
Project cost increased by four fold. R&R work comes to halt
2012: MP Government threatens to cancels PPA
2014: Committee for bailing out project formed.
2015: Company starts negotiation with PFC and other lenders to waive off interest.
Dec 17, 2015: PFC-led consortium decides to take over the project.