In a major setback to NTPC?s plans to add hydel-power capacity in the country, the government of Arunachal Pradesh has withdrawn two coveted hydro-electric projects awarded to the country?s largest power generation company.
The projects include the 4,000-mw Etalin and the 500-mw Attunli hydro-electric power projects in the Debang valley of the state. This came as a big shock for NTPC, which said, has already allocated considerable resources for timely and successful implementation of these projects.
The reason, as cited by the Arunachal Pradesh government in its November 6 letter to the company, is the inability on part of NTPC to deposit an upfront payment of Rs 250 crore to the state government. The two projects were awarded to NTPC under a memorandum of agreement (MoA) signed with the state government in September 2006.
As per the agreement, the projects were to be set up in central sector and were to be developed by NTPC subject to establishment of techno-commercial viability and clearance of the projects by the Central Electricity Authority (CEA) and the ministry of environment and forests. As per the agreement, NTPC was mandated to execute these projects on build-own-operate and maintain (BOOM) basis.
However, NTPC officials said that even before it could complete the techno-economic viability of setting up of these projects, the state government demanded NTPC for a upfront payment of Rs 250 crore, failing which the projects would be withdrawn.
?Also as this came as a sudden demand from the state government and as even the MoA signed between NTPC and the state government had no mention of such an upfront payment, NTPC objected to this sudden condition. This led to the state government intimidating NTPC on November 7 that the two project stands withdrawn from NTPC due to non-payment of upfront fees,? a senior company official said adding that the ministry of power has already taken up the matter with the state government.
In a letter to power ministry, NTPC has protested against the move by the state government and stated that introducing new factors like upfront premium, not envisaged in the MoA, would not be in the interest of the projects, which are likely to contribute to the development of the state and region as a whole.
The power ministry has asked the state government to allow NTPC to prepare a feasibility report for these projects before initiating discussions over such demands.
