Ongoing project finally gets Cabinet nod
It was a unique clearance to a project. The Cabinet accorded post-dated clearance to the 1,000 MW Indira Sagar power project in Madhya Pradesh after almost two years of the project being in operation. The project was a brain child of former Power Minister P.R. Kumaramangalam who spearheaded the signing of a joint venture between the Madhya Pradesh government and public sector National Hydroelectric Power Corporation (NHPC). But before Ranga could take the issue to the Cabinet for a clearance, he passed way.
As a result, the clearance for the project has been hanging fire for the last two years. The project was referred to the Cabinet Committee on Economic Affairs (CCEA) twice which refused to take a decision on the project and instead wanted the matter to be taken up by the full Cabinet.
And the reason why the approval was crucial was because failing clearance, the allocation of Rs 460 crore from the finance ministry would have lapsed. And this would have unleashed panic as the JV owed Rs 150 crore to Indian Railways and Rs 100 crore to public sector Bharat Heavy Electricals Ltd (BHEL)-both organisations of the government. Apart from this, the JV also owes Rs 50 crore to sundry contractors for the jobs done by them for the project.
The project originally belonged to the Madhya Pradesh government which had spent Rs 650 crore on the project but failed to complete it due to paucity of funds with the state government.
The then Power Minister Kumaramangalam, in order to revive the project, decided to bring in National Hydroelectric Power Corporation into the project with a majority stake so that the project could be completed and serve as a role model for other hydro projects. The JV was christened the Narmada Hydroelectric Development Corporation (NHDC).
A memorandum of understanding was signed between NHPC and the Madhya Pradesh government in May, 2000 following which the JV was finalised and came into being on August 1, 2000. The same month saw the demise of Kumaramangalam, which left, among other things, this project in the lurch.
Yogendra Prasad, chairman and managing director stated that NHPC had already incurred an expense of Rs 210 crore from its own funds for this project. He also said all the due formalities of getting a Public Investment Board clearance had been completed in March last year. The Cabinet clearance was awaited since then.
The project will have an estimated cost of Rs 4,355 crore and is expected to be completed by May, 2005.
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