Sikkim Hydropower Projects

Sikkim GatiSikkim, India’s tiny but picturesque hill state, had reasons to cheer recently when it saw its first independent hydropower project commissioned. The distinction went to Hyderabad-based Gati Infrastructures Ltd that started commercial operations from its 110-MW Chuzachen run-of-river project.

For logistics player Gati, hydropower generation represents a highly diverse activity. “It was not easy at all,” said Mahendra Agarwal, Founder & CEO, Gati Group, in a release. “Team work and dedication has helped us surpass all odds, right from technical glitches to finances,” he added.

For Sikkim also, the achievement is momentous. Hydropower is not just a means to meet local electricity demand, which incidentally is very limited, but if tapped judiciously, it can become the economic mainstay of the midget state.

Beginning 2003, Sikkim, in line with India’s power policy framework, sought private participation in tapping its hydropower potential. The journey was far from smooth, punctuated regularly with political controversies and deep social unrest. Between 2003 and 2008, Sikkim signed nearly 30 agreements with private power developers to build hydropower generation capacity of over 5,500 MW through run-of-river and storage schemes.

These agreements were signed in a rush. It is alleged that norms were flouted and projects were awarded almost arbitrarily without enough investigation into the technical and financial competencies of the potential developers. Further, the penalties envisaged in the agreement for delayed completion of projects were a pittance when compared to practices followed by other hydro-rich states in the north and northeast.

The biggest project of the lot, the 1,200-MW Teesta-III project, was mired in major controversy when it was allegedly awarded to a non-descript company that had no prior experience in hydropower generation. Available reports further point to an unholy nexus between the Sikkim government and retired bureaucrats in the process of awarding private power projects.

The biggest antagonism to Sikkim’s hydropower initiatives, especially projects on river Teesta, came from an activist group Affected Citizens of Teesta. The group mobilised enough support in their agitation against hydropower schemes on Teesta that they claimed would cause irreparable damage to the ecology apart from dislodging ethic communities like the Lepcha tribe.

Further, Delhi-based Centre for Inter-Disciplinary Studies of Mountains & Hills Environment, an independent body sponsored by the Ministry of Environment and Forests, recommended that no hydropower schemes be taken up above a certain location called Chunghthang in the course of river Teesta, in view of ecological considerations.

Succumbing to growing antagonism, the Sikkim government cancelled several agreements, especially in North Sikkim and Dzongu regions. Projects so affected were Teesta-I, Rangyong, Rolep, Chakungchu, Bimkyong etc. The list also included some agreements that were cancelled by the state government for sheer lack of project progress.

It is interesting to note that some private developers moved court challenging the cancellation and the Sikkim government restored some projects to the original developers. Some cases in point are the 96-MW Rongnichu project restored to Madhya Bharat Power Corporation Ltd, the 32-MW Bhasmey project handed back to Gati Infrastructures, and the 60-MW Tashiding project reinstated to Shiga Energy. However, some cancellations are still being disputed with Kalpan Hydro’s 60-MW Lethang and Himalayan Green Energy’s 280-MW Teesta-I being the prominent ones.

Despite all the ups and downs that Sikkim has endured in its hydropower initiative, it is encouraging to note that there are around 25 agreements in force envisaging a total capacity of around 5,000 MW. This includes agreements signed with central hydropower utility NHPC Ltd.

Incidentally, the biggest boost that Sikkim got was when NHPC commissioned its 510-MW Teesta (Stage V) project in March 2008. Prior to this, NHPC had commissioned its 60-MW Rangit project, some time in 1999. Teesta-V drastically altered the power scenario in Sikkim, improving power availability in the hill state almost overnight. Till NHPC came on the scene, the state government had only 37 MW of operational power capacity largely coming from micro and mini hydropower schemes.

The newly-formed Sikkim Power Development Corporation Ltd is the state’s power utility while another state government-owned entity Sikkim Power Investment Corporation Ltd also has equity stake (ranging from 11 per cent to 26 per cent) in private hydropower projects awarded under the MoU route.

Sikkim Hydropower ProjectCurrent trends
Projectmonitor got in touch with senior officials of Sikkim’s Power & Energy Department to generally understand the progress of ongoing hydropower projects. It appeared that while around 10 projects are in the construction stage, several projects are lagging behind. Apart from social resistance on environmental concerns, some projects are stymied on religious grounds. Besides, on-ground challenges like difficult topography are hindering the pace of several projects under construction. For instance, NHPC, which has two operational power projects, Rangit (60 MW) and Teesta-V (510 MW), is witnessing slow progress on its 520-MW Teesta-IV project for which the agreement was signed way back in March 2006. Social unrest, including that from the ACT group, has delayed matters. The public hearing for the project has been delayed for years together and is now expected to take place in June this year, Sikkim government officials noted. NHPC is also working on another 210 MW at Lachen project that is still in early stages.

Among those projects that are under construction, Sikkim is hopeful of the once-controversial 1,200-MW Teesta-III project turning operational by 2015. Although the project officials could not be contacted, Sikkim government officials noted that the Rs.5,700-crore project being implemented by Teesta Urja Ltd that had made considerable on-ground progress was adversely affected by a severe earthquake in September 2011. Much physical infrastructure, including the bridge for transportation for heavy machinery, had to be rebuilt, officials noted.

Two other projects, by the Dans Group, are making progress. Speaking to Projectmonitor, a senior project official explained that the 96-MW Jorethang Loop project and the 97-MW Tashding project were both under construction. The respective SPVs for the two projects are Dans Energy Pvt. Ltd and Shiga Energy Pvt. Ltd. While Jorethang could commission next year, it would take at least another two years for the Tashding project to turn operational, the official noted.

Dans Group is also developing the 99-MW Ting Ting project through TT Energy Pvt. Ltd. This project has received most pre-project clearances but land acquisition is being impeded by religious sentiments, it is learnt. It is also interesting to note that project developers are taking a synergic approach with a view to achieve project efficiencies. For instance, Dans Group and Jal Power Corporation Ltd, whose projects are in close vicinity, jointly floated tenders to source equipment for the New Melli 220kV substation, which would be a common pooling point for Jorethang Loop and Jal Power’s Rangit-IV project.

Him Urja Pvt. Ltd is developing the 480-MW Teesta-II project for which the MoU was signed in March 2006. A senior official told Projectmonitor that the project, dogged by local apprehensions, was still at the survey & investigation stage. Work could hopefully begin in the next two years, he noted. The official also mentioned that while the MoU was signed with envisaged capacity of 330 MW, subsequent hydrological studies established the potential of 480 MW.

Himagiri Hydro Energy Pvt. Ltd, a Nagarjuna Group company, expects to soon start full-fledged construction work on its 300-MW Panan project in North Sikkim. A company official said that most clearances were in place and land acquisition completed.

Gati Infrastructures, which commissioned its Chuzachen project, is also developing two other projects, namely Bhasmey (51 MW) and Sada-Mangder (71 MW). Bhasmey is under construction and likely to complete by 2016, while Sada-Mangder is in its early days.

The 40-MW Suntaleytar hydropower project being developed by Moser Baer Group is progressing well. A company official explained that the terms of reference (ToR) from the Ministry of Environment and Forests for the environmental impact study have been secured, and that development work at the project site was progressing satisfactorily. The Moser Bear Group, incidentally, is pursuing several hydropower projects spread over Himachal Pradesh, Sikkim and even Nepal, with an aggregate capacity exceeding 1,000 MW.

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