Revenue Generation From Hydro Power On Decline

Y.S. Rana

The writer is a Hamirpur based Himachali settled in Chandigarh

Chief Minister Virbhadra Singh has recently said that hydro power was the backbone of the state economy. The facts say otherwise. For a state that walked the path of development and set high standards for itself, can it hope so while the state has a huge debt burden and its hope hangs on hydro power that has recorded decline in revenue generation? Despite its precarious fiscal health and increasing debt, Himachal is witnessing a decline decline in revenue earnings from hydro power despite increase in its total generation. According to official data, state was earning a revenue of more than Rs 1,300 crores from the sale of electricity and upfront premium in 2007-08. However, revenue earning had reduced by 41% (Rs 772.67 crore) in 2011-12 despite 37% increase in total hydro power generation. An official of HP State Electricity Board admitted revenue loss that has declined to 50% at present. He further revealed that with a view to fast track the clearance procedure for hydro power projects, the department had done away with the requirement of separate no objection certificates from PWD, IPH besides gram panchayat which was earlier mandatory.

Besides this, the government had issued a notification in 2014 to set up a committee for speedy development of small hydro projects. Though the state has been making desperate attempts to revive the declining hydro power sector, inability of existing projects to be completed on time resulted in high cost of hydro power projects is also a worrying factor for the state government. Similarly, the government has not found a single bidder for nearly 37 hydro electric projects.   On the other hand, the state has 21,436 MW of hydel potential. Of this 9,202 MW has already been harnessed and 11,301 MW is under different stages. The state has so far tapped 10% solar energy.

Even the CAG of India report is a writing on the wall that has also rapped the state government’s hydro power policy to promote this sector to raise revenue against the interests of the state. “Not only private developers in the state are struggling to sell power but also the state government sells surplus power at exchange at unattractive prices,” admitted the official. He stated that power consumption in the state had undergone tremendous increase from 39 units in 1,970 to over 1,100 units as on today and there was around 57% decline in per unit electricity rate.

It is also revealed that several hydro power assets in the state were up for sale as many independent power producers were facing execution risks, mounting debt and liquidity issues. Situation of hydro power in the state has reached a point where hydro power companies are running losses but continue to generate surplus power. For example, Sawra Kuddu hydro electric project on Pabbar River, proposed to be commissioned in 2012, is still nowhere close to completion. The delay led to increase in cost to Rs 607 crore. This in turn will result in per mega watt cost to double from Rs 5.03 crore to Rs 10.50 crore. The delay in commissioning projects is being caused reportedly by the failure of regulatory agencies on one hand and violations by project proponents on the other side. In such a scenario, hydro power may not remain backbone of state’s economy for long. The state government should think seriously and take curative steps to boost the sector, feel knowledgeable persons.

Himachal-o-Meter

The state’s ups and downs this week

HPTDC Offers Apple Blossom Tour Package

Shimla:  In its endeavour to attract the attention of tourists, Himachal Pradesh Tourism Development Corporation (HPTDC) has come out with ‘apple blossom tour package’ concept for tourists this summer. The visitors will be taken to blooming apple orchards in Kotgarh, Narkanda, Shilaroo and other places in April-May. Managing director, HPTDC, Dinesh Malhotra, said the first apple blossom tour would start from Shimla in the second week of April and would cover to and fro journey by HPTDC deluxe buses from Shimla to Kotgarh. “The tour will cover Matyana-Shilaroo-Kandyali up to Kotgarh,” he added. The package charges are Rs 1,000 per person from Shimla. This will cover transportation, welcome drinks, lunch and tea with snacks at HPTDC hotels on the way. The second one night, two days package will include a stay at Hotel Hatu, Narkanda, along with bed tea, breakfast, lunch, evening tea and dinner. The charges of the package are Rs 3,500 per person. The tour will proceed to Kotgarh the next morning which offers a glorious view of apple orchards from Tani Jubbar and Kotgarh. The package aims at promoting tourism.

Few Takers For Government’s New Excise Policy

Solan: New Excise Policy appears to have backfired with officials failing to sell liquor vends in the first round of auctions which commenced at Baddi, Solan and Shimla. Since the department has enhanced the licence fee by 15% despite the closure of a large number of liquor vends lying within a 500 meter periphery of national and state highways, the contractors are not coming forward to bid. A similar situation has been witnessed in Solan and Baddi excise districts. The first phase of auctions had failed to sell even 50% of the liquor vends. A section of contractors said the state should have adopted the excise policy of Punjab where the quota of Indian-made foreign liquor has been reduced by 20% and retail groups will now be increased from earlier 14 to 25. Even the number of retail units has been reduced by 600 in view of the fact that a major chunk of the liquor vends along state and national highways within a 500 m periphery have been done away with in view of the apex court directions.

Keep watching our YouTube Channel ‘Divya Himachal TV’. Also,  Download our Android App