Nathpa project in jeopardy
From S.P. Sharma
Tribune News Service

SHIMLA, Oct 18 — A question mark has been put on the completion of the 1500-MW Nathpa Jhakri power project with the World bank deciding to midway suspends its $ 437 million loan for the Asia's largest underground hydroelectric project.

The decision of the World Bank has created panic as the project, near here, has remained in rough waters ever since work on it began in 1989.

The World Bank, which has made a commitment for the loan in 1989, has decided to suspend it because of the continuous delay and alterations in the height of the dam.

The issue will be considered by the Public Investment Board (PIB) at its meeting on October 21. The Nathpa Jhakri Power Corporation (NJPC) has moved the PIB for revision of the project cost to Rs 7,217 crore from the initial estimates of Rs 4,338 crore.

Sources said that the NJPC had so far spent $ 309 million on the project out of the World Bank loan. An amount of $ 128 million was unutilised when the decision to suspend the loan came. The loan was to be spent by December next. The cost of the project had escalated several times due to delays in its completion.

The project was initially slated to be commissioned this year. However, the target now has been fixed for the year 2001.

The project sources said the loan might have to be raised from commercial banks in case the World Bank did not review its decision.

The project is being constructed on an equity participation of 75:25 between the Centre and the Himachal Pradesh Government. Arrears amounting Rs 75 crore are already to be cleared by Himachal Pradesh on this account.

Another possibility to overcome the crisis was to increase the equity participation of both executing governments. However, this might not be possible because of financial crunch facing the state.

Although the World Bank had from time to time appreciated the progress of the project, yet it was not prepared to enhance the period of the loan.

The project has also suffered because of the ongoing tussle between the employees of the NJPC and the HPSEB over the working conditions.

Initially, the project management was operating from Delhi, but the headquarters of the NJPC had to be shifted here following a strong protest by the state government.