project finally gets Cabinet nod
NEW DELHI, MARCH 19: It was a unique
clearance to a project. The Cabinet on Tuesday accorded post-dated
clearance to the 1,000 MW Indira Sagar power project in Madhya
Pradesh after almost two years of the project being in operation.
The project was a brain child of former Power Minister P.R.
Kumaramangalam who spearheaded the signing of a joint venture
between the Madhya Pradesh government and public sector National
Hydroelectric Power Corporation (NHPC). But before Ranga could
take the issue to the Cabinet for a clearance, he passed way.
As a result, the clearance for the project
has been hanging fire for the last two years. The project
was referred to the Cabinet Committee on Economic Affairs
(CCEA) twice which refused to take a decision on the project
and instead wanted the matter to be taken up by the full Cabinet.
Even the full Cabinet deferred the decision
at least twice before finally approving it on Tuesday.
And the reason why the approval was crucial
on Tuesday was because failing clearance, the allocation of
Rs 460 crore from the finance ministry would have lapsed.
And this would have unleashed panic as the JV owed Rs 150
crore to Indian Railways and Rs 100 crore to public sector
Bharat Heavy Electricals Ltd (BHEL)óboth organisations of
the government. Apart from this, the JV also owes Rs 50 crore
to sundry contractors for the jobs done by them for the project.
The project originally belonged to the
Madhya Pradesh government which had spent Rs 650 crore on
the project but failed to complete it due to paucity of funds
with the state government.
The then Power Minister Kumaramangalam,
in order to revive the project, decided to bring in National
Hydroelectric Power Corporation into the project with a majority
stake so that the project could be completed and serve as
a role model for other hydro projects. The JV was christened
the Narmada Hydroelectric Development Corporation (NHDC).
A memorandum of understanding was signed
between NHPC and the Madhya Pradesh government in May, 2000
following which the JV was finalised and came into being on
August 1, 2000. The same month saw the demise of Kumaramangalam,
which left, among other things, this project in the lurch.
Speaking to The Indian Express,
Yogendra Prasad, chairman and managing director stated that
NHPC had already incurred an expense of Rs 210 crore from
its own funds for this project. He also said all the due formalities
of getting a Public Investment Board clearance had been completed
in March last year. The Cabinet clearance was awaited since
The project will have an estimated cost
of Rs 4,355 crore and is expected to be completed by May,