Public Private Partnership (ppp) in Indian Hydro-Power Industry

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The development in India’s North-Eastern regions will increase rapidly if Small Hydro Projects (SHP) are encouraged by central as well as the respective state governments as around 80 percent of the region’s total hydropower capacity is yet to be realized. The central Indian states have the highest installed capacity with 81% of the total capacity in operation and about 10 percent under construction stage, though the region receives scarce rain during monsoon. The west flowing rivers also have around 62.92% capacity in operation, but only 1% is under construction. These regions have many small streams which provide vast opportunities for hydropower development. Looking at the data, we can see that about 67.60% of hydropower capacity is yet to be reached. The huge differences between various river basins in the total installed power capacity can be seen from figure-2.

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PPP Policies for Hydro-Power Development

The Government of India has taken many PPP policy initiatives for sustainable hydropower development. In 1991, the government opened this sector for private participation and allowed 16 percent return on equity in 1992. After that, it notified Electricity Act 2003, National Electricity Policy 2005 and Tariff Policy 2006. It also brought out National Rehabilitation and Resettlement Policy in 2007 to ensure adequate rehabilitation package beyond monetary compensation through the active and transparent participation of project affected people to address the grievances of affected families. In 2008, they came out with a Hydro Policy with an objective to achieve the goal of power to all by the year 2012. Odisha adopted PPP policy in 2007, Arunachal Pradesh (2011), Uttarakhand (2012), Andhra Pradesh and Gujarat had framed PPP policy.

PPP Hydro-Projects in India

The controversies due to large hydropower projects are that it physically transforms rivers, inundate valuable ecosystems, involve the relocation of populations, often result in poorer water quality and contribute to a decline in the number of fish and other life-sustaining animals. In addition to this, due to growing resistance from the local people who get displaced from inundated areas as was seen in the Narmada, Sardar Sarovar and Tehri Dam, the government is now focusing more on SHP using ROR design as well as towards canal-based projects. There is significant potential for SHP in Himalayan and sub-Himalayan regions, but the power evacuation and transmission network needs expansion where PPP can play an important role [8].

Challenges

Growing awareness among people about global warming, climate change issues and the centralized manner of project planning with little input from the common people is making implementing of projects difficult. There is a widespread protest against hydropower projects that submerged lands, agricultural fields, forests, grazing lands and homes on a large scale which can lead to the displacement of a vast number of people. The villages settled along the river basin gets uprooted once the rivers go dry, leading to mass migration and cultural erosion. Some of the main challenges faced during hydro projects execution in the country discussed under the following heads.

Absence of PPP Policy

Some states have made policy while most of the states are yet to formulate to give the private partners clear guidelines for projects formulation and execution. Lack of clarity in the PPP law(s) creates ambiguity and results in unsustainable, unenforceable, or even illegal contracts. The earliest failed effort on PPP in the power sector can be traced down to Dabhol Power Project in Maharashtra [9].

Land Acquisition

The land acquisition for hydroelectric projects is a time consuming lengthy process in India. The Land required for various purposes like building dams, power house, and switch yards. The main occupations of people in India are agriculture and its allied activities. The various protests while acquiring land for projects include Tata Nano Project at Singur in West Bengal, Posco project in Odisha and Reliance Power’s Dadri project in Uttar Pradesh. Moreover, the states have different policies for land purchase/allotment that also create hurdles while acquiring land for various purposes.

Environment and Forest issues

Hydropower projects in the country require environmental and forest clearances, which are recommended by two separate committees besides wildlife clearances from National Board of Wildlife. The expert appraisal committee, which looks into environmental parameters, is set up under the Environment Protection Act, while the forest advisory committee, which considers the diversion of forest land, is set up under the Forest Conservation Act. However, SHP projects up to 25MW are exempt from obtaining environmental clearance but have to obtain permission from State Pollution Control Board (SPCB) for clearance under Air and Water Act [10].

Natural Calamities

The Himalayan region is prone to earthquake, landslides, cloud burst, glacial lake outbursts and flash floods. In Uttarakhand state, SHP stations are more vulnerable to natural calamities as their power channels are more prone to landslides and cloud bursting. The recent devastating natural disaster in the state has severely shaken the confidence of private investors in 199 ongoing hydropower projects with an estimated potential of 14.4 GW and existing 45 projects have suffered huge losses [11].

Law/Order Problem & Local Issues

Most of the hydro projects are constructed in hills or on foothills. It displaces local people who have their law and custom, and they do not want to deviate them from it.The state machinery takes much time to respond in such situations. The local person wants all the local resources for the development of their regions and creates problems when their demands are not meet.

Inter-state Disputes

The Indian rivers run through many states, and there are many conflicts amongst them for sharing of waters. The dispute between Kerala, Tamil Nadu, and Karnataka for the utilization of Cauvery water, Karnataka and Andhra Pradesh over Tungabhadra River, Vansadhara dispute between Andhra Pradesh and Odisha, Krishna dispute between Maharashtra, Karnataka and Andhra Pradesh are some of the examples in India.

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