| New projects
vi) Geological Surprises: Many hydroelectric projects have been delayed due to geological surprises.
vii) Natural Calamities: Natural calamities like unprecedented rain/flash floods, cloud burst, earthquake etc have delayed project completion.
viii) Inter-state Issues: Hydroelectric projects can get delayed due to inter-state disputes.
The Ministry of Power has further stated that in addition to the above, the nation-wide lockdown, imposed during March 2020 in order to contain the Covid-19 pandemic, had a huge impact on commissioning activities at site in terms of exodus of labour from major project sites, difficulty in manpower augmentation due to travel restrictions and quarantine requirement, restrictions on the movement of supplies, goods, consumables, cement and aggregates etc. As a result, the commissioning of hydroelectric projects under construction was delayed.
Among these issues, the Standing Committee on
Energy said that funding constraints followed by geological uncertainties and law and order/local issues are more dominant. The committee believes that these issues are common and generally occur in large construction projects, which can be addressed and managed by having firm contractual guidelines in place prior to the start of the projects and with adequate policy and regulatory support. All Indian hydro power projects, regardless of the capacity have now been included in the renewable energy segment, and the committee is hopeful that this will give further impetus to the hydro sector and facilitate commissioning of projects as per their stipulated timeline. [In contrast the committee states that only one out of 26 renewable projects has been delayed]. The committee recommends that:
● Due to the long construction period of hydro power
projects, interest on loans plays a very critical role in the operation period and higher interest on outstanding loans leads to a higher yearly tariff. A review of the financing policies for hydro power projects is required with a view to providing longer tenure debt with softer interest rates.
● Inadequate infrastructure like roads and bridges, particularly in Arunachal Pradesh and the north- eastern states, result in longer construction periods thereby increasing project cost. Agencies implementing the road sector projects need to be provided with adequate support to complete the projects expeditiously.
● Considering the long gestation period and large investment involved, a single window clearance mechanism will be necessary to reduce the cost and time overrun by a considerable margin. The committee believes that this will encourage developers to undertake projects and make large investment in hydro power sector.
To reduce delays and increasing costs for hydro projects, the Ministry of Power stated that it has issued various measures, including: ● Reviewing the delegation of power at project level. ● Adopting international best practice for implementation of projects.
● Ensuring availability of resources, namely equipment and manpower.
● Keeping record and reports in electronic form. ● Timely decision by the management to resolve stalled work for any reason other than natural calamity.
● Defining risk sharing mechanisms in contractual documents.
● Incentivising labour on achieving project milestones in time ●
www.waterpowermagazine.com | November 2021 | 29
Above: Hydropower construction in Uttarakhand, India. A new report has looked at construction delays and cost over-runs in hydropower projects
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