NHPCs Myanmar projects deemed unviable, shelved

Written by Huma Siddiqui | New Delhi | Updated: Jan 23 2014, 03:50am hrs
State-owned NHPCs proposed hydel projects in Myanmar, 880 MW Tamanthi and 880 MW Shwezaye, are unlikely to take off given their social and environmental implications and abnormally high tariffs.

NHPC was asked by the ministry of external affairs (MEA) to develop the two projects to promote cooperation between India and Myanmar in the hydropower sector.

Sources said the Myanmar government has asked NHPC to suspend implementation work on the two projects after it came out recently in detailed projects reports (DPRs) that implementing the projects could lead to serious social and environmental consequences. Besides, tariffs worked out in the reports were also not found to be viable.

As per the DPR prepared for the Tamanthi, developing the project would require expenditure of at least R17,270 crore. That would entail minimum electricity tariff of R6.46 a unit for the project. The cost economics of the Shwezaye is even worse, with tariff estimated at R11 a unit. Since hydel projects are prone to cost escalation due to the possibility of geological and hydrological surprises during implementation, further increase in project cost and tariffs cannot be ruled out.

India and Myanmar have reviewed the detailed reports of the Tamanthi and Shwezaye hydro-electric projects prepared by NHPC. Taking into consideration the questions raised with regard to the economic viability of these projects and potential social and environmental impact, both sides have agreed to suspend any further action on them for the present, a government official told FE on the condition of anonymity.