Himachal drops plan to transfer 4 power projects to HPPCL

Shimla, August 31

The state government has dropped its plan to transfer four small hydroelectric projects from the Himachal Pradesh State Electricity Board Limited (HPSEBL) to Himachal Pradesh Power Corporation Limited (HPPCL).

The projects to be transferred were SAI Kothi-1 (15 MW), Sai Kothi-11 (18 MW), Devi Kothi (16 MW) and Hail (18 MW) in Chamba district. The government has withdrawn the decision in view of the serious concerns raised by the Planning Department over the proposed transfer of these projects.

Planning Dept’s concerns

• As per the loan agreement, prior consent of the German funding agency (KfW) is a must in case any modification is done in the project, executive agency’s name, etc.
• The funding agency will appraise the projects afresh to evaluate the credentials and capacity of the HPPCL, causing a delay of at least a year in the execution of these projects

As per the orders issued today by the Secretary (Power), the HPSEBL will continue to be the executing agency for these projects. “However, for the speedy completion of work, the HPSEBL will assign these projects to some dedicated and responsible officers who will ensure completion of these projects without any time and cost overruns,” the order said.

The HPSEBL management has been directed to review the progress of these projects fortnightly and apprise the government. The Planning Department had flagged the inevitable delay, additional costs and possible objections from the German funding agency (KfW) to the proposal of changing the executing agency for these projects. These projects are to be built at an estimated cost of Rs 880 crore.

“As per the loan agreement, prior consent of the KfW is a must in case any modification is done to the project, executive agency’s name, etc…,” the Planning Department had noted. It said the funding agency would appraise the projects afresh to evaluate the credentials and capacity of the HPPCL, causing a delay of at least a year in the execution of these projects.

Before the Planning Department flagged its concerns, the HPSEBL Employees Union had also opposed the move, raising more or less the same concerns. Apart from time and cost overruns, the union had said that the HPSEBL staff that would be shifted to the HPPCL along with these projects would face problems related to service conditions.