NHPC, which was assigned the task of recommending alternate plans for developing the project has also proposed to undertake complete financing, construction and operation of this project following an appropriate power sharing agreement between the states of Karnataka and Tamil Nadu.

Official sources said that a draft memorandum of understanding (MoU) for execution of the Cauvery project, besides other hydro projects which can come up in the Cauvery basin, has been been prepared by NHPC and the same has been sent for the consideration of the government's of Tamil Nadu and Karnataka respectively.

"It is now being proposed to organise a meeting with the respective state government's in order to finalise this MoU so that furthersteps could be taken for the funding and execution of the project with power sharing between the two states on the basis of mutual agreement", a senior official said.

It may be mentioned here that since the Cauvery river flows through the states of Kerala, Tamil Nadu as well as Pondicherry, a MoU has to be signed between the government of India and the concerned states and the Union Territory.

Whereas, earlier both Karnataka and Tamil Nadu had submitted two different proposals for developing this project which, however, were found to be mutually irreconcilable. Both the state government's have been putting forward different conflicting schemes for exploiting power potential of the Cauvery river.

It was following these disputes that the power ministry had directed NHPC to review the proposal made by the two state governments on the basis of the water flow ordered by the Cauvery Water Disputes Tribunal.

Officials said that NHPC's plans of developing hydro projects on the disputable stretch are currentlyunder consideration of the two government's. The draft MoU is also under discussions with the representatives of the two states.

As per the first alternate plan proposed by NHPC, there would be three separate hydro-electric projects with an aggregate installed capacity of 870 mwS. For this, NHPC has proposed construction of three dams with generating units at Mekadatu (550mw) in Karnataka and Rasimanal (200 mw) and Hogenakkal (120mw) in Tamil Nadu.

According to the second plan, there can be two separate dams, instead of three, with an aggregate installed capacity of 880 MWs. This can be done by constructing two damns at Mekadatu (550mw) and the other at Rasimal (330mw) respectively.

Officials said that both these proposals would enable the production of 2450 million units of energy and would also be consistent with the orders from the Cauvery Water Dispute Tribunal regarding water flows.

As per the draft MoU, NHPC has proposed to undertake the funding, construction and operation of the power projectsin the stretch of the river between KRS dam in Karnataka and Mettur dam in Tamil Nadu. However, a final consent from the state governments over this is yet to be received, officials said.

In addition to the Cauvery project, four other hydro projects totaling another 200 mwhave been identified in Cauvery basin. The detailed project reports (DPR's) of these projects have been submitted to the Central Electricity Commission (CEA) for the techno-economic clearance (TEC).