The Hindu Business Line : CCEA revises cost of Tehri project phase-I

THE Cabinet Committee on Economic Affairs (CCEA) on Wednesday revised the construction cost of the 1,000-mega watt (MW) first phase of the Tehri Hydro-Electric Project to Rs 6,621.31 crore. The revised amount includes the cost of essential works of the Tehri pump storage plant, the Finance Minister, Mr P. Chidambaram, told mediapersons here.

The CCEA also decided to convert the Rs 563.19-crore loan released by the Government into equity with effect from 1998-99. Subsequently, the debt-equity ratio of the project comes to 1:1, as recommended by the Public Investment Board. The Tehri Hydel Development Corporation (THDC) has raised Rs 751.80 crore as the loan for power component of the project from external commercial borrowings. The corporation has raised aggregate Rs 2,720.18 crore for power components.

Once the conversion is done, the Government would provide no budgetary support and funds needed for the project would be raised by THDC from financial institutions and banks. This would enable completion of the Tehri Stage-I project, which was approved by the Planning Commission in 1972. Though construction work started in 1978, the project witnessed a number of delays leading to time and cost overruns due to protests by environmentalists and locals. The Supreme Court had given the green signal to implementation of the project, subject to completion of rehabilitation works.

The CCEA also approved a sanction of Rs 351.87 crore for the completion of the Salma dam project (Stage I) in Afghanistan by the Water and Power Consultancy Services (India) Ltd. The approval for the project, which would generate 42 MW of power, was given at a Cabinet meeting chaired by the Prime Minister, Dr Manmohan Singh.

The Afghan Government had requested India to carry out a feasibility study and a detailed project assessment and had also sought funding and execution of the project. The project, which would be completed in four years, would generate local employment and meet the basic needs of electricity and water leading to the overall development of the region.