Delay in Vishnugad Pipalkoi Hydro Electric Project

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Dr. Bharat Jhunjhunwala, PhD (Food and Resource Economics,

Florida), Former Professor, IIM Bengaluru
Lakshmoli, PO Maletha, Kirti Nagar, Uttarakhand - 249161
Phone: 85278-29777; Email: bharatjj@gmail.com
25.10.2021
To
The Secretary
Ministry of Power
Shram Shakti Bhawan
Rafi Marg
New Delhi – 110001
Sub: PIB/CCEA Clearance for Additional Public Investment in

Vishnugad-Pipalkoti Hydro Electric Project (VPHEP)
Sir:
By way of this letter, I seek to bring to your kind attention that

the Vishnugad-Pipalkoti HEP has been beset with huge increases
in cost and delays in commissioning. As per THDCIL progress
reports, the cost has been increasing at an average of Rs 369
crores per year and the date of commissioning has been
increasing @ 8.8 months per year. At this rate the project is only
likely to be commissioned in February 2031 at a cost of Rs 8862
crores. Details are given at Annexure 1.
The commissioning at February 2031 is likely since only 15

percent work has been done as on July 2021 Annexure 2. In this
regard, following factors are critical to be noted as set out below:
1. Electricity at Rs 9.55 per unit

2
The THDC has filed a cost benefit analysis with Ministry of

Environment and Forest (MOEF) wherein it had projected the cost
of generation of electricity at Rs. 2.26 per unit at a project cost of
Rs 2,096 crores Annexure 6. On a pro-rata basis, the cost of
electricity generated will be Rs 9.55 per unit (2.26*8862/2096).
2. Electricity at Rs 11.81 per unit due to e-flows
The above estimates have been made at e-flows of 15.65 cumecs

or 7.3 percent of the flows available (The average flow in
Alaknanda River at Dam Site during the last 10 years of which
data is given in the EIA of VPHP is 213.5 cumecs (Page 30 Table
3.7.4 of EIA)). Or, 92.7 percent flows were available for generation
of electricity. The Ministry of Jal Shakti (MoJ) has specified that
the under-construction projects will be required to release 20 –
30% Environmental Flows (E-Flows). We can take an average of
25% E-Flows. Or, 75.0 percent flows will be available for
generation of electricity. Therefore, the generation of electricity
will be reduced from 1657 million units to 1340 million (units
(134.0 crore units) (1657/92.7*75)and correspondingly the cost of
electricity produced will increase from Rs. 9.55 to Rs 11.81 per
unit.
3. Environmental cost
I have published a paper in the International Journal of Economy,

Energy and Environment assessing the environmental benefits and
costs of the project Annexure 8. As per my estimate the project
will impose a present discounted cost due to environment (after
accounting for benefits from carbon emissions) saved of Rs 521
3
crore on the economy Annexure 7. The total cost of the project

will increase to Rs 9383 crores and the cost of electricity produced
will increase to Rs 12.50 per unit if environmental costs are
included.
4. Burden on the economy
The long-term price of base electricity on IEX is about Rs 3.50 per

unit. Pipalkoti is a base electricity producing station. Thus, the
consumer as well as the economy will pay an additional cost of Rs
8.31 per unit (11.81-3.50). The discounted present value of this
burden for the next 40 years assuming that the project will be
commissioned in February 2031 would amount to Rs. 4708
crores Annexure 7. This cost will be saved and economy will be
benefitted by this amount if the project is abandoned
immediately. Additional benefits of discounted value Rs 521
crores due to environmental costs saved will be obtained making
total benefit of Rs 5229 crores if environmental costs are
considered.
I have ignored the benefits due to profits of THDCIL and

employment; and costs due to budgetary support to keep this
representation simple since these are minor factors and do not
affect the overall picture. The benefits due to royalty and local
area development are subsumed in the lower cost of electricity.
The cost of electricity would increase in same proportion as the
benefits due to these factors.
5. The case for decommissioning
The present expenditure on the project is Rs 2271 crores at July

2021 Annexure 5, Page 6. The gain to the economy from
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decommissioning is Rs 4708 crores as calculated above; and Rs

5229 crores if environmental costs are included. Therefore, it is
more prudent to abandon the project at the present stage.
I have to request you to kindly consider these submissions before

approving any further expenditures of public money on this
project.
I may mention that I had submitted a similar representation to

you in 2019 which is set out at Annexure 9. My submissions at
that time were based on the THDCIL report of February 2019; and
I had estimated environmental costs on the basis of Purulia
project. I have now used the THDCIL report of July 2021 and
estimates of the VPHEP hence there is a downward variation of
cost estimates. However, I had estimated the date of
commissioning at 2031 at that time (12 years from 2019) which
stands vindicated at present developments.
I take the liberty of drawing your kind attention that the

Government is bound not to act against the Directive Principles of
the Constitution that enjoin the Government to work for the
welfare of the people. In this regard, the following judicial
precedents by various courts including the Hon’ble Supreme
Court are relevant for consideration. The relevant extracts of the
judgments are reproduced herein below for your ease of reference:
Sachinanda Pandey v. State of West Bengal (1987) 2

Supreme Court Cases 295
“4… Whenever a problem of ecology is brought before the
court, the court is bound to bear in mind Article 48-A of the
Constitution, the Directive Principle which enjoins that “the
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State shall endeavour to protect and improve the environment

and to safeguard the forests and wild life of the country”, and
Article 51-A(g) which proclaims it to be the fundamental duty
of every citizen of India “to protect and improve the natural
environment including forests, lakes, rivers and wild life, and
to have compassion for living creatures”. When the court is
called upon to give effect to the Directive Principle and the
fundamental duty, the court is not to shrug its shoulders and
say that priorities are a matter of policy and so it is a matter
for the policy-making authority. The least that the court may
do is to examine whether appropriate considerations are
borne in mind and irrelevancies excluded. In appropriate
cases, the court may go further, but how much further must
depend on the circumstances of the case. The court may
always give necessary directions.”
Indian Handicrafts Emporium v. Union of India, (2003) 7

SCC 589
“52. We cannot shut our eyes to the statements made in
Article 48-A of the Constitution of India which enjoins upon
the State to protect and improve the environment and to
safeguard the forests and wildlife of the country. What is
destructive of environment, forest and wildlife, thus, being
contrary to the directive principles of State policy which is
fundamental in the governance of the country must be given
its full effect. Similarly, the principles of Chapter IV-A must
also be given their full effect. Clause (g) of Article 51-A
requires every citizen to protect and improve the natural
environment including forests, lakes, rivers and wildlife and
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to have compassion for living creatures. The amendments

have to be carried out keeping in view the aforementioned
provisions.”
Municipal Council, Ratlam v. Vardichan, (1980) 4 SCC
162
“24…Where directive principles have found statutory
expression in Do's and Dont's the court will not sit idly by and
allow municipal government to become a statutory mockery.”
I sincerely hope that your high office will give due consideration
and time to address the concerns raised in this letter as the
public money as well as overall safekeeping of the environment is
at stake.
Yours Truly,
Dr. Bharat Jhunjhunwala
List of Annexures
1. Estimated cost and date of commissioning, Page 7-8.
2. 15 percent work done in July 2021, Page 9.
3. THDCIL Progress Report of June 2019, Page 10-14.
4. THDCIL Progress Report of December 2018, Page 15-19.
5. THDCIL Progress Report of July 2021, Page 20-25.
6. CBA filed by THDCIL with MOEFCC, Page 26-27
7. Calculation of Discounted Present Value, Page 28-29.
8. CBA published, Page 30-40.
9. Representation of 2019, Page 41-46.
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Annexure 1: Estimated Cost and Delays

Delay in commissioning
Row
Row above)
below – Row above)

Column 2, Row below –
Scheduled
Months added to date

of commissioning
Months added to date

commissioning as per
of commissioning per
12 months(Column 5/
announcement (From
column 4*12)
Months elapsed to new
Date of THDCIL
Annexure
Progress Report
(From Column 3, Row

announcement
Date of announcement
1 2 3 4 5 6 79
June 2019 January
1 2014 July 2018 NA NA NA 3
July 2021 Dec
2 July 2021 2023 90 66 8.8 5
VPHEP was granted Techno-economic Clearance (TEC) by the Central Electricity

Authority (CEA) on 21.09.2006. The project cost was 2,491 crores (Annexure 3,
Para 3). The Forest Clearance was obtained in December 2013 hence the zero date
appears to have been taken at Jan 2014. Accordingly the date of commissioning as
announced by THDCIL was 54 months from January 2014 or July 2018 (Annexure
3, Para 9).
In its Progress Report of July 2021, THDCIL specified the date of commissioning as
December 2023 (Annexure 5, Para 9). Between January 2014 and July 2021—a
period of 90 months—the time got extended by 66 months (@ 8.8 months/year). In
other words, THDCIL undertakes only 3.2 months or 0.27 years of announced work
in every year.
As of July 2021, the announced months to commissioning were 30 (July 2021 to
December 2023). However, THDCIL will actually undertake only 0.27 years of
announced work in every year in this period. Accordingly the actual time taken will
be 9.2 years from July 2021 (2.5 years announced time / 0.27 years work undertaken
in each year = 2.5/0.27 = 9.2 years from July 2021. The project is accordingly likely
to be commissioned only in February 2031.
Increase in cost
8
Row
below – Row above)

Cost increase as per
Cost increase per 12

Date of
Total cost as per
new announcement
new announcement
announcement of cost
above)
months (Column 5/
column 4*12)
Months elapsed to
(From Column 2==,

Row below – Row
Date of THDCIL
(From Column 3, Row
Annexure
Progress Report
announcement
1 2 3 4 5 6 7
June 2019 January
1 2014 2491 NA NA NA 3
June 2019 Feb
2 2019 4397 62 1906 369 3
The original project cost was 2,491 crores (Annexure 3, Para 3). The Forest
Clearance was obtained in December 2013 hence the zero date appears to have been
taken at Jan 2014. Accordingly the date of commissioning as announced by THDCIL
was 54 months from January 2014 or July 2018 (Annexure 3, Para 9).
In its Progress Report of June 2019, THDCIL disclosed it had given a RCE of 4397
crores at February 2019 prices crores to MOP (Annexure 4, Para 3); and specified
the date of commissioning as December 2022 (Annexure 4, Para 9). Between
January 2014 and February 2019—a period of 62 months—the cost increased by Rs
1906 crores (@ 369 crores/year).
In its Progress Report of July 2021, THDCIL repeated the RCE of 4397 crores at
February 2019 prices (Annexure 5, Para 3). This RCE is obviously flawed because
time of 25 months had elapsed from June 2019 and that would have led to an increase
in cost. Hence, we ignore this RCE.
Estimate of Completed Cost
The project is estimated to be completed in February 2031. The last true cost
disclosed was Rs 4397 crores in February 2019. The cost will escalate from February
2019 to February 2031, 12 years and 1 month, or 12.1 years. The cost will increase
by Rs 369 crores per year in this period or by Rs 4465 crores. The total cost will be
Rs 8862 crores (4397 crores cost as at February 2019 + escalation Rs 4465 crores).
The THDC has filed a cost benefit analysis with ministry of Environment and
Forest (MoEF) for obtaining clearance under the Forest Conservation Act. This
statement shows a project cost of Rs 2,096 crores. The cost of electricity produced
from the project is specified of Rs. 2.26 per unit in this statement (Annexure 6). On
a pro-rata basis the cost of electricity generated will be Rs 9.55 per unit
(2.26*8862/2096).
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Annexure 2: 15 percent progress till date

The above scenario is quite likely because only 15% work has been done on the
ground as on date.
Sl. Work Present status of the Analysis Percent
No. Project as per CEA July Completed
2021 report.
1. Desilting 3 De-silting Chambers - 40.0
chambers benching 40% completed
2. HRT-TBM Heading excavation of HRT by Length of Head Race 5.5
Commissioned DBM has been completed Tunnel is 13.4 km. Of
but no progress 739m out of 960m. TBM has this (1) 739 m DBM;
been commissioned and nil HRT has been
completed as TBM is
During operation of TBM in
hampered. Thus
the RBM zone, big boulders
739/13400 = 5.5% is
have been encountered,
complete.
which has hampered TBM
operation. To overcome this
problem two Approach Adits
are being constructed to
reach the cutter head.
3. Tail Race Tunnel In TRT, heading excavation Although this is only 14.4
443m out of 3070m excavation, yet giving
completed. benefit of doubt we
may consider
443/3070 = 14.4%
complete.
4. Barrage - As per our information 0.0
zero work is done.
Silence in CEA
Progress report
confirms this.
5. Electro- Supply works of Rs 167.60 The cost of Electro- 16.3
mechanical crore has been completed. mechanical works was
works 473.64 crores out of
Total Project cost is 4397
project cost of 2031.64
Crore.
crore as per TEC
(Annexure A-17).
Pro-rata the cost of
Electro-mechanical
works will be 1024
crore at project cost of
4397 cr. Of this 167.60
crore or 16.3% is
completed.
6. Average 15.2
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VISHNUGAD PIPALKOTI HEP (444 MW)

(UNDER CONSTRUCTION ON RIVER ALAKNANDA IN DISTT. CHAMOLI, UTTRAKHAND)
Vishnugad-Pipalkoti Hydro Electric Project (4x111 MW) is a run-of-the-river scheme. It

envisages construction of a 65 M high concrete diversion dam harnessing a gross
head of 237 M on river Alaknanda (a major tributary of river Ganga). The project is
located in district Chamoli in the state of Uttarakhand, 225 km from Rishikesh on NH-
58.
1.0 PROJECT BENEFITS
 Capacity addition of 444 MW in the Northern Region, reducing peaking power
shortage in the region.
 Annual Design Energy of 1657.09 MU (with 95% machine availability).
 Integrated Development of Chamoli / Garhwal region in the areas of employment,
communication, education, health, tourism, development of Flora & Fauna etc.
 Out of 13% free power to the home state Uttarakhand, 1% shall be utilized for
contribution towards local area development.
2.0 PROJECT APPROVALS

Sl. Description of Approvals Date
No.
1 Signing of MoU between THDCIL and GoUK for 08.04.2003
investigation & preparation of DPR
2 Approval of Commercial viability of the project by CEA. Feb’2005
3 Signing of Implementation agreement. 02.06.2006
4 Approval of Techno-Economic clearance to the project by Sep’2006
CEA.
5 Investment approval to the project amounting to 2491.58 21.08.2008
Cr (March-08 PL) by CCEA.
6 Revision in “Minimum Environmental Flow” by MoEF from 31.05.2011
3 Cumecs to 15.65 Cumecs.
7 Stage-1 clearance of 80.507 Ha forest land by MoEF. 03.06.2011
8 Final approval for transfer of 80.507 Ha of forest land by 28.05.2013
MoEF.
9 Issuance of G.O. for transfer of 80.507 Ha of forest land 06.12.2013
by GoUK.
10 Signing of Lease agreement for 80.507 Ha. Forest land. 05.04.2014
11 Declaration of Land (identified for compensatory afforestation) 26.08.2014
as protected forest in lieu of 80.507 Ha. forest land.
3.0 REVISED COST ESTIMATE

Investment approval to the project amounting to 2491.58 Cr (March-08 PL) was
accorded by CCEA in Aug’2008. As desired by MoP, RCE at May’17 PL of
3789.61 Cr (including IDC & FC of 235.59 Cr.) has been submitted to MoP on
31.10.2017 for approval.
 After preliminary examination of RCE, CEA had returned the same on 17.11.2017
for reframing & incorporating the approved changes of modified structures after
getting approval of MOC from CEA/CWC.
 Revised Design Energy of the Project has been finalized as 1657.09 MU by CEA on
09.01.2018.
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 Memorandum of changes (MOC) have been cleared from different Directorates of

CWC/CEA. Final meeting of the Authority for approval of MoC held on 27.03.2018
wherein the MoC has been approved.
 RCE of Rs 4397.80 Cr at Feb'19 PL has been submitted to MoP on 31st May 2019.
4.0 MAJOR WORKS

Major civil works includes a 65 M high Concrete dam, 13.4 Km long Head Race
Tunnel, 3.07 Km long Tail Race Tunnel, Spillways, Underground Power House
(146x20.3x48m) & Transformer hall (140.3x15x25.5m), 3 nos. under ground de-
silting Chambers (390x16x21.25m) each, U/S Surge Shaft (154m height and dia
15/22m) and D/S Surge Tank (150x13x25m). The layout plan of the project is
enclosed as Exhibit – IV.
5.0 PROJECT FUNDING

Construction of the project is proposed to be funded with a Debt: Equity ratio of
70:30. The Equity portion; 50% is to be shared by THDCIL and remaining 50% is to
be shared by GOI and GOUP in the ratio of 75: 25 respectively.
For the funding of the debt portion (70%) of the project, loan agreement for US $648
million has been signed with World Bank on 10th Aug-11. The loan includes US $10
million for Capacity Building and Institutional Strengthening (CBIS).The loan has
become effective from 7th Nov-11 with tenure of 29 years.
6.0 PRELIMINARY PROJECT WORKS:

Investigations:
 Geological investigations at all locations of the project and various required
studies have been completed.
Rehabilitation & Resettlement:
THDC India Ltd has formulated a Rehabilitation & Resettlement policy (R&R Policy)
for the Vishnugad Pipalkoti Hydro Electric Project. The Policy is based on the
National Rehabilitation & Resettlement Policy 2007 (NRRP-2007) incorporating the
better features considering the World Bank Guidelines on Involuntary Settlement and
needs & expectations of the stakeholders.
The Policy addresses the R&R issues through proactive approach and appropriate
Planning on Land Acquisition. Besides disbursement of compensation by Special
Land Acquisition Officer (SLAO), the Policy envisages provisions of grants and other
benefits considering the categories and the Entitlements.
For effective implementation of R&R policy, Rehabilitation Action Plan (RAP) has
been formulated so that after reasonable transition period, the affected families
improve, at least regain their previous standard of living, earning capacity and
production levels.
Land Acquisition:
 A total of 132.029 Ha. of Private land and forest land has been acquired for
VPHEP of which 31.639 Ha is Private Land and 100.39 Ha is Forest Land.
 The Implementation of Rehabilitation Action Plan (RAP) and R&R related Activities
are presently under Progress. The Project has taken over the possession of
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requisite 31.639 Ha. of Private Land across 7 Villages. Around 94% of

Compensation amount has been disbursed by Special Land Acquisition Officer
(SLAO). Of the 07 Affected Villages, only one village i.e. Haat is getting relocated.
 In village Haat 20.337 Ha land has been acquired. Through District Administration
83 residents households have been identified. 77 families have signed agreement
with THDCIL, 77 have constructed houses and 77 have shifted. 61 families have
demolished their houses.
 The process of extending the Special Package among “Non-Residents” House
Owners as per eligibility is underway. District Administration has verified the list of
50 Non-Resident HSO’s. The registration has been completed for 38 HSO’s & 36
Houses have been demolished so far.
 Agreement stand signed with all 09 ST Families. Of the 9 Families, 02 families
have already been disbursed a total Special Package of INR 1 Million & the
Families have shifted as well. The 1st & 2nd Installment of 3 Lakhs each of the
total INR 01 Million has been disbursed among remaining 7 ST Families.
Construction of all 7 Houses (1 Combined) is complete. Finishing activities
are under Final Stage. The Houses are under construction on 8 Naali (1600 Sq.
M.) of land purchased by 7 ST Families. Development of Area including providing
necessary infrastructure facilities at above relocation site has since been
completed by THDCIL.
Social Responsibilities:
 Various skills up-gradation & income restoration programs are being undertaken
for livelihood promotion and better employment opportunities for the Project
Affected People (PAP). Various Trainings comprising of dairy farming, vermin
composing, cutting & tailoring, knitting, kroiler management, Napier grass
production, Production of cash crops, promotion of Tulsi for herbal medicines,
horticulture activities, bee keeping etc. have been imparted to PAPs. Apart from
this, Vocational Trainings in hotel management, skill enhancement activities, etc.
are also undertaken, in coordination with various institutes like GMR Foundation,
Dr. Reddy Foundation, and Industrial Training Institutes in nearby areas.
 The training on knitting & tailoring has already been imparted among the women
from Villages; Tapon, Salna, El Dana & Daswana. Around 113 & 67 Females have
been benefitted from Training on Tailoring & Knitting respectively from said
villages. The Females have started activity of their own. THDCIL purchases the
sweaters & payment being disbursed at Rs. 450 per piece. THDCIL distributes the
sweaters to the needy children studying in Primary School. THDCIL has
purchased 2 Knitting Machines and given to SHGs at Haat & El Dana as well. The
Trainer as & when required for training is deputed by Project. The NGO also
intervenes from time to time. The knitting & tailoring activity has since become
rotational due to which the Females in Project Area are getting independent
financially.
 A 3 Days Training on Promoting Oyster Mushroom cultivation at Dehradun during
June, 2017 conducted for 8 Women PAPs from village Guniyala, Haat & Jaisal.
These PAPs have cultivated good quantity of Oyster Mushrooms for themselves.
THDCIL provided requisite equipments for promotion of Oyster Mushroom
cultivation among PAPs.
 A total of 14 Youths from villages ; Helong, Gulabkoti, Batula, Dungri Baroshi,
Baula-Durgapur, Naurakh, Bentha & Haat completed 3 Months skill development
training on Electrical & Excavator Operator Trade / 5 - Months Refrigerating & Air
Conditioning under Vocational Training Institute of GMR, New Delhi. The
Expenditure on account of the above Training has been borne by THDCIL.
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 The Public Information Center (PIC) established at Gulabkoti is since functional.

The PIC is equipped with computers. The youths from Gulabkoti & nearby villages
attend the centre to build confidence towards working on Computers. Around 12
Youths have been benefitted till date.
 Various community development programs in affected villages are in progress that
comprise of; Infrastructure activities, drinking water supply, distribution of
generators, school bags, Uniforms, Sweaters, Solar Lights etc.
 After flagging off the Mobile Health Van equipped with advance life support
equipments to VPHEP on 25.04.18, 2 Medical Camps 1 each on 20th June, 2018 &
15th Sept., 2018 have been conducted at Pipalkoti & Gaadi villages respectively.
The Camps has been immensely beneficial for Local Population & nearby areas
that include People from Project Affected Villages of VPHEP. Apart from above,
THDCIL organised Health Awareness Camp on 2 nd Dec., 2018 at Village Math.
The Camp was specifically for females PAP`s. Around 70 Female PAP`s attended
the Camp. Mobile Health Van including the THDCIL Doctor accompanied
Paramedical Staff was present at Camp. Necessary Medicines etc. were
distributed among PAP`s after reqsite check up.
 The Scholarship Policy of VPHEP is under implementation since its
inception during Academic year 2011-12. Till March, 2019, around 1411
students that include 803 Girls from Project Affected Villages have been
benefitted from the Scheme.A Cumulative Expenditure of Rs. 74.31 Lakh
stand incurred by Project till Academic Year 2018-19.
Infrastructure works:
All four bridges, approach roads to bridges, colony area, Dam site and Power house
site, have been completed.
Most of the infrastructure development works have been completed.
Supply and installation of equipment of dam site sub-station has been completed
and sub-station has been handed over to THDCIL. Installation of equipment in
Power House Sub-station building by UPCL has been completed.
7.0 PROJECT STATUS: Project is being executed through two separate EPC contracts
and one Design Review Consultancy Package.
1. Design Review Consultancy:

Contract Agreement for Design Review Consultancy Package has been signed on
28th Dec-13 with M/S SMEC International Pty Ltd, Australia amounting to 10 Cr
(appx.) and AUS $557 thousand (appx.). The work is in progress.
2. Civil works and Hydro - Mechanical works :

[
Civil & HM works awarded to M/S HCC Ltd and agreement has been signed on
17.01.2014 amounting to 1597 Cr (appx.).
The structure wise progress is placed at Exhibit - V.
3. Electro - Mechanical works: EM works (amounting to INR 360.36 Cr. + USD 1.02
Cr.) were awarded to M/s BHEL on 18th Nov-2014.
 Model testing of Turbine has been completed.

 Power House Station Layout and longitudinal section has been approved. BFV
Chamber Plan & Section View is approved.
 Measurement of soil resistivity at five locations (TRT outlet area, Intake tunnel
area, Access tunnel area, Cable tunnel, Ventilation tunnel, pothead yard and GIS
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control area) of project has been conducted, on remaining six locations (Power
intake area, Penstock tunnel area, Tailrace tunnel area, Power house and
transformer halls, Butterfly valve area and PAC Area), shall be conducted on
availability of fronts.
 Design of EOT crane of power house and BFV has been completed.
 Design documents/drawings related to Turbine i.e Runner, Shaft, servomotor,
guide bearing and control gear of turbine, Draft Tube embedments, Governor etc.
has been approved.
 Design drawings and documents of generator are approved.
 Design documents of Excitation system, Power House Grounding system and
auxiliaries’ transformers are approved.
 Single line diagram of 400 kV GIS, Pothead yard and Basic Design of Protection
system (i.e Main Single Line Diagram), GIS & Pothead yard are approved.
 Basic Design of XLPE Cable, Pothead Yard, Control System, GIS, IPBD,
Illumination system, HVAC, Passenger Elevator, Mechanical/Electrical Workshop,
Lubricating Oil Handling System, drainage dewatering system and fire Protection
and Detection System are approved.
 Approval of Design Documents related to MIV and BFV i.e Design is in advance
stage.
Balance Design and Engineering is in progress.
8.0 EXPENDITURE ON THE PROJECT:

The expenditure incurred on VPHEP Project till July’19 is 1718.69 Cr (39.08%).
including IDC & FC of 95.70 Cr out of revised RCE at Feb’19 PL for 4397.80
Cr.including IDC & FC of 374.54 Cr submitted to MOP on 31.05.19 for approval.
9.0 COMMISSIONING SCHEDULE:

The project was originally conceived to be commissioned within 54 months from
the award of Civil and HM works i.e. by July’2018. Contract for Electro-mechanical
works could be signed in November’2014 with a completion period of 48 months
i.e. by Nov.’2018.
The main civil contractor M/s HCC, being under financial stress, is not even able to
provide BGs against gap funding. Works on all fronts were moving at very slow
pace since April’18 and later on were standstill since 15.10.18 till 15.01.19 due to
strike by HCC’s workers for non payment of their wages. Works started
remobilizing slowly since 15.01.2019 after call off of strike by M/s HCC workers.
Considering the delays occurred since April’18, the anticipated commissioning is
Dec.’2022.
10.0 Issue to be Resolved:

Mining approval for Gadi quarry for VPHEP
 Gadi Quarry is designated for Power House & TBM works at our Vishnugaad
Pipalkoti HEP(444 MW). It was acquired along with other forest lands in the year
2014 itself. State Wildlife and National Wild life had already cleared all the forest
land provided to project.
 Environment Clearance to operate ‘Gadi Quarry’ from SEIAA(State Environment
Impact Assessment Authority) is required. Mining of Stone from Birahi Gadi Quarry
(4.292 Ha), the mining plan stands already approved by CA. The environment
clearance which has to be granted by SEIAA (State Environment Impact
Assessment Authority) on recommendation of SEAC(State Environment Appraisal
Committee) is in process of scrutiny at SEAC level.
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(UNDER CONSTRUCTION ON RIVER ALAKNANDA IN DISTT. CHAMOLI, UTTRAKHAND)
Vishnugad-Pipalkoti Hydro Electric Project (4x111 MW) is a run-of-the-river scheme. It

envisages construction of a 65 M high concrete diversion dam harnessing a gross head
of 237 M on river Alaknanda (a major tributary of river Ganga). The project is located in
district Chamoli in the state of Uttarakhand, 225 km from Rishikesh on NH-58.
1.0 PROJECT BENEFITS
 Capacity addition of 444 MW in the Northern Region, reducing peaking power shortage
in the region.
30.04.2015
2.0 PROJECT APPROVALS
No
.
1 Signing of MoU between THDCIL and GoUK for 08.04.2003
investigation & preparation of DPR
2 Approval of Commercial viability of the project by CEA. Feb’2005
4 Approval of Techno-Economic clearance to the project by Sep’2006
CEA.
5 Investment approval to the project amounting to 2491.58 21.08.2008
Cr (March-08 PL) by CCEA.
6 Revision in “Minimum Environmental Flow” by MoEF from 31.05.2011
3 Cumecs to 15.65 Cumecs.
MoEF.
9 Issuance of G.O. for transfer of 80.507 Ha of forest land 06.12.2013
by GoUK.
1 Signing of Lease agreement for 80.507 Ha. Forest land. 05.04.2014
0
1 as protected forest in lieu of 80.507 Ha. forest land.
3.0 REVISED COST ESTIMATE

Investment approval to the project amounting to 2491.58 Cr (March-08 PL) was
accorded by CCEA in Aug’2008. As desired by MoP, RCE at May’17 PL of 3789.61
Cr (including IDC & FC of 235.59 Cr.) has been submitted to MoP on 31.10.2017 for
approval.
 After preliminary examination of RCE, CEA had returned the same on 17.11.2017 for
reframing & incorporating the approved changes of modified structures after getting
approval of MOC from CEA/CWC.
 Revised Design Energy of the Project has been finalized as 1657.09 MU by CEA on
09.01.2018.
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 Memorandum of changes (MOC) have been cleared from different Directorates of

CWC/CEA. Final meeting of the Authority for approval of MoC held on 27.03.2018
wherein the MoC has been approved.
 RCE of 4105.30 Cr. at March’18 PL (incorporating approved MOC) has been

submitted by THDCIL to MoP on 30.07.18.
4.0 MAJOR WORKS

Major civil works includes a 65 M high Concrete dam, 13.4 Km long Head Race
Tunnel, 3.07 Km long Tail Race Tunnel, Spillways, Underground Power House
(146x20.3x48m) & Transformer hall (140.3x15x25.5m), 3 nos. under ground de-silting
Chambers (390x16x21.25m) each, U/S Surge Shaft (154m height and dia 15/22m) and
D/S Surge Tank (150x13x25m). The layout plan of the project is enclosed as Exhibit –
IV.
5.0 PROJECT FUNDING

Construction of the project is proposed to be funded with a Debt: Equity ratio of 70:30.
The Equity portion; 50% is to be shared by THDCIL and remaining 50% is to be shared
by GOI and GOUP in the ratio of 75: 25 respectively.
million for Capacity Building and Institutional Strengthening (CBIS).The loan has
6.0 PRELIMINARY PROJECT WORKS:

Investigations:
 Geological investigations at all locations of the project and various required studies
have been completed.
Rehabilitation & Resettlement:
THDC India Ltd has formulated a Rehabilitation & Resettlement policy (R&R Policy) for
the Vishnugad Pipalkoti Hydro Electric Project. The Policy is based on the National
Rehabilitation & Resettlement Policy 2007 (NRRP-2007) incorporating the better
features considering the World Bank Guidelines on Involuntary Settlement and needs &
expectations of the stakeholders.
The Policy addresses the R&R issues through proactive approach and appropriate
Planning on Land Acquisition. Besides disbursement of compensation by Special Land
Acquisition Officer (SLAO), the Policy envisages provisions of grants and other benefits
considering the categories and the Entitlements.
For effective implementation of R&R policy, Rehabilitation Action Plan (RAP) has been
formulated so that after reasonable transition period, the affected families improve, at
least regain their previous standard of living, earning capacity and production levels.
Land Acquisition:
 A total of 132.029 Ha. of Private land and forest land has been acquired for VPHEP
of which 31.639 Ha is Private Land and 100.39 Ha is Forest Land.
 The Implementation of Rehabilitation Action Plan (RAP) and R&R related Activities
are presently under Progress. The Project has taken over the possession of requisite
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31.639 Ha. of Private Land across 7 Villages. Around 94% of Compensation amount
has been disbursed by Special Land Acquisition Officer (SLAO). Of the 07 Affected
Villages, only one village i.e. Haat is getting relocated.
 In village Haat 20.337 Ha land has been acquired. Through District Administration 83
residents households have been identified. 77 families have signed agreement with
THDCIL, 77 have constructed houses and 76 have shifted. 60 families have
demolished their houses.
 The process of extending the Special Package among “Non-Residents” House
Owners as per eligibility is underway. District Administration has verified the list of 50
Non-Resident HSO’s. The registration has been completed for 37 HSO’s & 36
Houses have been demolished so far.
 Agreement stand signed with all 09 ST Families. Of the 9 Families, 02 families have
already been disbursed a total Special Package of INR 1 Million & the Families have
shifted as well. The 1st & 2nd Installment of 3 Lakhs each of the total INR 01 Million
has been disbursed among remaining 7 ST Families. The Houses are under
construction on 8 Naali (1600 Sq. M.) of land purchased by 7 ST Families.
Construction of 5 Houses is complete & Finishing activities are under progress.
Foundation work for remaining Houses is nearing completion. Development of Area
including providing necessary infrastructure facilities at above relocation site has
since been completed by THDCIL.
 Various skills up-gradation & income restoration programs are being undertaken for
livelihood promotion and better employment opportunities for the Project Affected
People (PAP). Various Trainings comprising of dairy farming, vermin composing,
cutting & tailoring, knitting, kroiler management, Napier grass production, Production
of cash crops, promotion of Tulsi for herbal medicines, horticulture activities, bee
keeping etc. have been imparted to PAPs. Apart from this, Vocational Trainings in
hotel management, skill enhancement activities, etc. are also undertaken, in
coordination with various institutes like GMR Foundation, Dr. Reddy Foundation, and
Industrial Training Institutes in nearby areas.
 The training on knitting & tailoring has already been imparted among the women from
Villages; Tapon, Salna, El Dana & Daswana. Around 113 & 67 Females have been
benefitted from Training on Tailoring & Knitting respectively from said villages. The
Females have started activity of their own. THDCIL purchases the sweaters &
payment being disbursed at Rs. 450 per piece. THDCIL distributes the sweaters to
the needy children studying in Primary School. THDCIL has purchased 2 Knitting
Machines and given to SHGs at Haat & El Dana as well. The Trainer as & when
required for training is deputed by Project. The NGO also intervenes from time to
time. The knitting & tailoring activity has since become rotational due to which the
Females in Project Area are getting independent financially.
 A 3 Days Training on Promoting Oyster Mushroom cultivation at Dehradun during
June, 2017 conducted for 8 Women PAPs from village Guniyala, Haat & Jaisal.
These PAPs have cultivated good quantity of Oyster Mushrooms for themselves.
THDCIL provided requisite equipments for promotion of Oyster Mushroom cultivation
among PAPs.
 A total of 14 Youths from villages ; Helong, Gulabkoti, Batula, Dungri Baroshi, Baula-
Durgapur, Naurakh, Bentha & Haat completed 3 Months skill development training on
Electrical & Excavator Operator Trade / 5 - Months Refrigerating & Air Conditioning
under Vocational Training Institute of GMR, New Delhi. The Expenditure on account
of the above Training has been borne by THDCIL.
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18
 The Public Information Center (PIC) established at Gulabkoti is since functional. The
PIC is equipped with computers. The youths from Gulabkoti & nearby villages attend
the centre to build confidence towards working on Computers. Around 12 Youths
have been benefitted till date.
 Various community development programs in affected villages are in progress that
comprise of; Infrastructure activities, drinking water supply, distribution of generators,
school bags, Uniforms, Sweaters, Solar Lights etc.
 After flagging off the Mobile Health Van equipped with advance life support
equipments to VPHEP on 25.04.18, 2 Medical Camps 1 each on 20th June, 2018 &
15th Sept., 2018 have been conducted at Pipalkoti & Gaadi villages respectively. The
Camps has been immensely beneficial for Local Population & nearby areas that
include People from Project Affected Villages of VPHEP. Apart from above, THDCIL
organised Health Awareness Camp on 2nd Dec., 2018 at Village Math. The Camp was
specifically for females PAP`s. Around 70 Female PAP`s attended the Camp. Mobile
Health Van including the THDCIL Doctor accompanied Paramedical Staff was
present at Camp. Necessary Medicines etc. were distributed among PAP`s after
reqsite check up.
 The Scholarship Policy of VPHEP is in the process of implementation since 2010. Till
March, 2018, around 1156 students that include 648 Girls from Project Affected
Villages have been benefitted from the Scholarship Assistance Scheme. A
Cumulative Expenditure of Rs. 54.0 Lakh stand incurred by Project till academic Year
2017-18.
 The 1st Installment of Scholarship Assistance for the Academic Year 2018-19 has
been disbursed. The Assistance has benefitted 247 Students that comprise of 149
Girls. An amount of Rs. 9.79 Lakhs stand incurred by Project to this effect.
Infrastructure works:
All four bridges, approach roads to bridges, colony area, Dam site and Power house
site, have been completed.
Most of the infrastructure development works have been completed.
Supply and installation of equipment of dam site sub-station has been completed and
sub-station has been handed over to THDCIL. Installation of equipment in Power
House Sub-station building by UPCL has been completed.
7.0 PROJECT STATUS: Project is being executed through two separate EPC contracts
1. Design Review Consultancy:

Contract Agreement for Design Review Consultancy Package has been signed on 28 th
Dec-13 with M/S SMEC International Pty Ltd, Australia amounting to INR 10 Cr
(appx.) and AUS $557 thousand (appx.). The work is in progress.
2. Civil works and Hydro - Mechanical works :

[
17.01.2014 amounting to INR 1597 Cr (appx.).
3. Electro - Mechanical works: EM works (amounting to INR 360.36 Cr. + USD 1.02 Cr.)
were awarded to M/s BHEL on 18th Nov-2014.
 Model testing of Turbine has been completed.
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19
 Power House Station Layout and longitudinal section has been approved. BFV
Chamber Plan & Section View is approved.
 Measurement of soil resistivity at five locations (TRT outlet area, Intake tunnel area,
Access tunnel area, Cable tunnel, Ventilation tunnel, pothead yard and GIS control
area) of project has been conducted, on remaining six locations (Power intake area,
Penstock tunnel area, Tailrace tunnel area, Power house and transformer halls,
Butterfly valve area and PAC Area), shall be conducted on availability of fronts.
 Design of EOT crane of power house and BFV has been completed.
 Design documents/drawings related to Turbine i.e Runner, Shaft, servomotor, guide
bearing and control gear of turbine, Draft Tube embedments, Governor etc. has been
approved.
 Design drawings and documents of generator are approved.
 Design documents of Excitation system, Power House Grounding system and
auxiliaries transformers are approved.
 Single line diagram of 400 kV GIS, Pothead yard and Basic Design of Protection
system (i.e Main Single Line Diagram), GIS & Pothead yard are approved.
 Basic Design of XLPE Cable, Pothead Yard, Control System, GIS, IPBD, Illumination
system, HVAC, Passenger Elevator, Mechanical/Electrical Workshop, Lubricating Oil
Handling System, drainage dewatering system and fire Protection and Detection
System are approved.
 Approval of Design Documents related to MIV and BFV i.e Design is in advance
stage.
Balance Design and Engineering is in progress.

8.0 EXPENDITURE ON THE PROJECT:
The expenditure incurred on VPHEP Project till Dec’18 is Cr (63.90%).
including IDC & FC of Cr out of approved cost 2491.58 Cr (March-08 PL).
9.0 COMMISSIONING SCHEDULE:

The project was originally conceived to be commissioned within 54 months from the
award of Civil and HM works i.e. by July’2018. Contract for Electro-mechanical works
could be signed in November’2014 with a completion period of 48 months i.e. by
Nov.’2018.
The main civil contractor M/s HCC, being under financial stress, is not even able to
deploy adequate resources or provide BGs against gap funding. Hence, works are
suffering at all the fronts. Recently works suffered from 10.08.18 to 20.08.18 due to
strike by M/s HCC’s workers/sub-contractor because of non-payment of wages.
Presently, works are again on stand still since 15.10.18 due to same reason.
Considering the delays occurred since April’18, the anticipated commissioning, as
envisaged earlier in Dec.’2021 for VPHEP may further delay.
10.0 BUDGET ESTIMATE V/S EXPENDITURE: Total BE 2018-19 is

Expenditure during the month is Cr. against BE of Cr. Cumulative
expenditure during 2018-19 is Cr. against corresponding BE of
Cr.
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(UNDER CONSTRUCTION)
VishnugadPipalkoti Hydro Electric Project (4x111 MW) is a run-of-the-river scheme. It

envisages construction of a 65m high concrete diversion dam harnessing a gross head
of 237m on river Alaknanda (a major tributary of river Ganga). The project is located in
district Chamoli in the state of Uttarakhand, 225km from Rishikesh on NH-58.
PROJECT BENEFITS
 Capacity addition of 444 MW in the Northern Region, reducing peaking power
shortage in the region.
PROJECT APPROVALS
No.
1 Signing of MoU between THDCIL and GoUK for investigation 08.04.2003
& preparation of DPR
2 Approval of Commercial viability of the project by CEA. 03.02.2005
4 Approval of Techno-Economic clearance to the project by 21.09.2006
CEA.
5 Environment Clearance by MoEF&CC 22.08.2007
6 Investment approval to the project amounting to 2491.58 Cr 21.08.2008
(March-08 PL) by CCEA.
7 Revision in “Minimum Environmental Flow” by MoEF from 3 31.05.2011
Cumecs to 15.65 Cumecs.
MoEF.
10 Issuance of G.O. for transfer of 80.507 Ha of forest land by 06.12.2013
GoUK.
11 Signing of Lease agreement for 80.507 Ha Forest land 05.04.2014
as protected forest in lieu of 80.507 Ha. forest land
REVISED COST ESTIMATE

Investment approval to the project amounting to 2491.58cr (Mar’2008 PL) was
accorded by CCEA in Aug’2008. As desired by MoP, RCE at May’2017 PL of
3789.61cr (including IDC & FC of 235.59cr.) has been submitted to MoP on
31.10.2017 for approval.
 After preliminary examination of RCE, CEA had returned the same on

17.11.2017 for reframing & incorporating the approved changes of modified
structures after getting approval of MOC from CEA/CWC.
 Revised Design Energy of the Project has been finalized as 1657.09 MU by CEA
on 09.01.2018.
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21
 Memorandum of Changes (MOC) have been cleared from different Directorates

ofCWC/CEA. Final meeting of the Authority for approval of MoC held on
27.03.2018 wherein the MoC has been approved.
 RCE of Rs 4397.80cr at Feb'2019 PL was submitted to MoP on 31.05.2019.RCE
of 3860.35cr at Feb'2019 PL has been vetted by CEA on 20.03.2020. After the
strategic sale of GoI equity in THDCIL to NTPC, RCE has also been approved
by NTPC Board on 31.07.21.
MAJOR WORKS
Major civil works includes a 65m high Concrete dam, 13.4km long Head Race
Tunnel, 3.07km long Tail Race Tunnel, Spillways, Underground Power House
(146x20.3x48m) & Transformer hall (140.3x15x25.5m), 3 nos. underground de-
silting Chambers (390x16x21.25m) each, U/S Surge Shaft (154m height and dia
15/22m) and D/S Surge Tank (150x13x25m). The layout plan of the project is
enclosed as Exhibit – IV.
PROJECT FUNDING
Construction of the project is proposed to be funded with a Debt: Equity ratio of
70:30. Earlier the Equity portion 50% was to be shared by THDCIL and remaining
50% by GoI and GOUP in the ratio of 75: 25 respectively. However, after the
strategic sale of GoI equity inTHDCIL to NTPC on 27.03.2020, the equity of GoI
shall be shared by NTPC instead of GoI.
million for Capacity Building and Institutional Strengthening (CBIS). The loan has
However, on the request of THDCIL, the World Bank has cancelled partial loan
proceeds of US $100 million each on 27.06.2019 and 07.04.2021. The loan amount
for this project is now US $448 million.
The world Bank has also granted further extension of Loan Closing Date till
30.06.2022 on its expiry on 30.06.2021.
PRELIMINARY PROJECT WORKS:

Investigations:
 Geological investigations at all locations of the project and various required
studies have been completed.
REHABILITATION & RESETTLEMENT: (As on 31st May, 2021)

THDCIL has formulated a Rehabilitation & Resettlement policy (R&R Policy) for the
VishnugadPipalkoti Hydro Electric Project. The Policy is based on the National
Rehabilitation & Resettlement Policy 2007 (NRRP-2007) incorporating the better
features considering the World Bank Guidelines. The Policy addresses the R&R
issues through proactive approach and appropriate Planning on Land Acquisition.
Besides disbursement of compensation by Special Land Acquisition Officer (SLAO),
the Policy envisages provisions of grants and other benefits considering the
categories and the Entitlements. For effective implementation of R&R policy,
Rehabilitation Action Plan (RAP) has been formulated so that after reasonable
2
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transition period, the affected families improve, at least regain their previous standard
of living, earning capacity and production levels.
At present the RAP implementation is under progress & is being monitored by the
third party and the World Bank Authorities.
Land Acquisition:
A total of 141.568 Ha.of Land comprising of 31.639 Ha.of Private land across 7
Villages, 100.390 Ha. of Forest / Van Panchyat / Civil Soyam Land from 22 Revenue
Villages & 9.539 Ha. of PWD Land has been acquired / Diverted for VPHE Project.
The Project has taken over the possession of total land.
Status R&R:
The Implementation of Rehabilitation Action Plan (RAP) and R&R related Activities
are presently under implementation. Compensation has been provided by SLAO to
PAFs whose land, assets, etc has been acquired for the project under LA Act 1894.
Additional R&R grants / Assistance have been provided by THDCIL as per the
approved R&R policy.
Around 94% of Compensation amount has been disbursed by Special Land
Acquisition Officer (SLAO) and approx. 88% R&R grant have been disbursed by
THDCIL.
Haat Status:
Of the 07 affected Villages, only 1 village i.e. Haat is getting relocated having 140
PAFs. Following is the status:
 Resident HHs – 81 nos (Agreement signed – 77, House constructed- 76,
shifted- 76, House demolished-61).
 Non Resident HHs – 50 nos (Agreement signed – 38, House demolished- 36)
 ST Families – 9 nos (Agreement signed – 9, house constructed – 9, House
demolished-2
The 7 ST families have constructed their houses on the 8 Naali (1600 Sq. M.) land
purchased by them on Kaudiya-Haat road. Development of Area including providing
necessary infrastructure facilities at above relocation site has since been completed
by THDCIL.
Construction of Common Property Resources:
In addition to the compensation / Grants provided by SLAO/ THDCIL, common
property resources like Pathways, Drinking water facility, Street Light, Primary
School, PanchayatGhar, Anganwari Kendra etc has been constructed at self
resettlement sites.
Loss of Fuel & Fodder:

Each entitled house hold in the affected habitation is being paid 100 days of
Minimum Agriculture Wages per year for a period of 5 yrs. On the recommendation
of World Bank, THDCIL has increased disbursement of fuel and fodder grant from 5
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years to 8 years. The amount is paid as a grant / assistance towards the loss of fuel
and fodder. Around 2700 households are being benefited through this assistance.
Community Development Works:

Under Community development various works have been taken up in the Project
affected villages ie; construction of Pathways, Waiting shelters, Community
buildings, Road widening, Hill side slope protection works, Solar street lights for
villages, furniture & sports kits for community, water supply schemes, Teaching aids
& furniture to schools, Construction of additional classrooms & toilets, promotion of
sports & cultural activities, awareness camps on social & environmental aspects,
health camps & awareness camps on HIV AIDS, Pulse Polio etc.
Livelihood Activities:
Various activities have also been taken up to create livelihood opportunities. These
are Dairy Development, Poultry, Tailoring & Stitching, Wool Knitting, Bee Keeping,
Mushroom cultivation, vermin composting to promote organic farming, plantation etc.
Awareness programs for Project affected people are also organized with the help of
various State Govt. Depttsie; Horticulture, Agriculture, Tourism, Animal Husbandry
etc to give awareness on various schemes, subsidies, technical assistance etc to
convince local youth to opt for self employed income generation activities. Around
500 beneficiaries are benefited through these programs.
On the recommendations of the World Bank, the work towards “Engagement of
Specialized Agency to help Prepare Livelihood Development / Employment
Generation Plan & its Implementation in relation to VPHEP” has been awarded to
M/s MridaRenergy& Development Pvt. Ltd, New Delhi. The Agency has commenced
the work on 03.01.2020 & the Agency has submitted the Inception Report. The
agency commenced the Baseline survey & completed for around 10 villages as
reported until Lockdown due to Covid-19 Pandemic w.e.f 23.03.2020 was
announced. The survey activity got suspended for around 4½ Months & got resumed
only on 05.08.2020. The Baseline Survey has been completed & Draft Baseline
Report was submitted on 5th Dec., 2020. Based on the Comments from THDCIL &
the World Bank, the Agency has submitted the Final Baseline Report as well & is
presently under checking.
Vocational Trainings:
Apart from above, Vocational Trainings in hotel management, Excavator operator,
Electrician, Fitter, Refrigerating & Air Conditioning and other skill enhancement
activities, etc. are also undertaken, in coordination with various institutes like GMR
Foundation, Dr. Reddy Foundation, and Industrial Training Institutes in nearby areas.
Around 300 beneficiaries are benefited through these programs.
Education:
To promote Education the Project has undertaken various activities ie; Scholarship to
Project affected Meritorious/Poor/ Girls students, Construction of additional class
rooms & toilets, providing teaching aids & uniform, Assistance for getting admission
in ITIs, assistance to schools for cultural activities etc. Around 1400 students having
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approx. 800 girls have been benefitted through scholarship program of THDCIL till
Academic year 2018-19.
Health:
The project is helping PAPs by facilitating them to THDCILs Dispensaries
(Allopathy& Homeopathy) established in the Project Campus. OPD / IPD facility
including medicines is given free of cost to PAPs. In addition to this Medical health
camps are organized in project affected villages and Ambulance facility is also
provided to the needy PAPs free of cost. The Health camps have been immensely
beneficial for local population & nearby areas that include people from project
affected villages of Project. Approx. 18000 beneficiaries having approx 5000 females
have been administered treatment in Allopath and approx. 24600 benefited in
Homeopathy.
One Tipper TATA ACE 1.8 cum has been handed over to Nagar Panchyat, Pipalkoti,
Chamoli for transportation of garbage from Nagar Panchyat areas of Pipalkoti to
disposal sites under their control. The vehicle has been given to Nagar Panchyat
under Corporate Social Responsibility (CSR). The garbage as generated at THDCIL
Project Complex is also being managed by Nagar Panchyat.
Employment:
Keeping in view that the Hydro Projects are capital intensive with the state of the art
technology and therefore do not offer much employment opportunity, particularly in
unskilled category, the option of providing job with THDCIL as per policy is not
considered as a rehabilitation option. However, as on date around 1118 persons
have been provided direct/Indirect employment opportunities in project implementing
Agency M/s HCC / THDCIL/ Contractors/ Hiring of vehicles/Lease land for various
purposes etc.
Infrastructure Works:
 All four bridges, approach roads to bridges, colony area, Dam site and Power
house site, have been completed.
 Most of the infrastructure development works have been completed.
 Supply and installation of equipment of dam site sub-station has been completed
and sub-station has been handed over to THDCIL.
 Installation of equipment in Power House Sub-station building by UPCL has
been completed.
PROJECT STATUS: Project is being executed through two separate EPC contracts
 Design Review Consultancy:

Contract Agreement for Design Review Consultancy Package has been signed on
28th Dec-13 with M/S SMEC International Pty Ltd, Australia amounting to 10cr
(approx) and AUS $557 thousand (approx.). The work is in progress.
[
 Civil works and Hydro - Mechanical Works:
5
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17.01.2014 amounting to 1597cr (approx.) with completion period Jul’2018 as per
contract.

Electro - Mechanical works: EM works (amounting to INR 360.36cr. + USD 1.02 cr)
were awarded to M/s BHEL on 18.11.2014 with completion period Nov’2018 as per
contract.
Status of EM supply: Following items have been supplied by BHEL:
 EOT cranes for Machine hall (150 T/50T/10T) - 2Nos, EOT crane for Butterfly
valve (150T/ 50T) - 01 Nos.
 Turbine: Runner of all the 4 units, Turbine Shaft arrangement for all the 4 Units;
Guide vanes all the 4 Units; MIV of 3 units, Butterfly valve- 02 Nos.; Stay ring for
all the 4 units, Spiral casing for all the 4 units, GV servomotors for all the 4 units,
Embedded parts for installation of DT Cone (for all 4 units); DT Elbow Liner (for
all 4 units); pipes & embedment and tubes & embedment (for all 4 units),
foundation parts for installation of stay ring, spiral casing, spiral inlet pipe, pit
liner, embedded pipes (for all 4 units)
 Turbine Auxiliaries: MIV pipe lines, Butterfly Valve pipe lines, Draft Tube
Drainage Valve, Guide Apparatus- Top cover, Regulating ring, Pivot ring,
Arrangement of MIV Servomotor, Bypass Valve for MIV, Air valve for MIV,
Cooling Water System – Pipes – Filters – Heat exchangers, Runner Labyrinth,
Pit oil coolers for both Upper and Lower Guide Bearing for all 4 units.
 Generator: Wound stator, Rotor assembly, Wound Pole Assy. Generator upper
& lower brackets, Rotor spider, Rim punching, Generator air cooler all 4 units,
excitation panel for 2 units.
 Generator Auxiliaries: Generator shaft assembly (all 4 units), Generator
flooring for all 4 Units, Erection Tools for Rotor, Erection Tools for Poles, Stator
Instruments - RTD & Thermostat, Slip Ring Assy. - Carbon Dust Collector, Fan
assembly, Erection Tools for Generator Shaft, Generator Heater stator sole plate
assembly, Brake and jack control panels.
 Isolated phase Buds Duct for Unit 1 &2
Total supply of materials amounting to 167.60cr has been completed.
COMMISSIONING SCHEDULE:
The 1st Unit is likely to be commissioned by Dec'2023.
EXPENDITURE ON THE PROJECT:

Total expenditure incurred on VPHEP Project till Jul’2021is 2271.35cr (including
IDC & FC of 170.63cr).
BUDGET ESTIMATE V/S EXPENDITURE:

Expenditure incurred during the month is r against BE of 25.73cr.
Cumulative expenditure during F.Y. 2021-22 till Jul’2021is 51.06cr against BE
of 72.62cr.
Issues to be Resolved
Permission for Mining at Gadi Quarry from GoUK
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Burden on
economy Rs Burden on Environ- Burden on
Electricity crore per economy mental cost economy
generated year @ Rs 10% discount Discounted Rs crore per Discounted
Year crore units 8.31 per unit factor Present value year Present value
2023 1.000
2024 0.900
2025 0.810
2026 0.729
2027 0.656
2028 0.590
2029 0.531
2030 0.478
2031 133.6 1110.216 0.430 477.912 123 52.947
2032 133.6 1110.216 0.387 430.120 123 47.653
2033 133.6 1110.216 0.349 387.108 123 42.887
2034 133.6 1110.216 0.314 348.398 123 38.599
2035 133.6 1110.216 0.282 313.558 123 34.739
2036 133.6 1110.216 0.254 282.202 123 31.265
2037 133.6 1110.216 0.229 253.982 123 28.138
2038 133.6 1110.216 0.206 228.584 123 25.325
2039 133.6 1110.216 0.185 205.725 123 22.792
2040 133.6 1110.216 0.167 185.153 123 20.513
2041 133.6 1110.216 0.150 166.637 123 18.462
2042 133.6 1110.216 0.135 149.974 123 16.615
2043 133.6 1110.216 0.122 134.976 123 14.954
2044 133.6 1110.216 0.109 121.479 123 13.459
2045 133.6 1110.216 0.098 109.331 123 12.113
2046 133.6 1110.216 0.089 98.398 123 10.901
2047 133.6 1110.216 0.080 88.558 123 9.811
2048 133.6 1110.216 0.072 79.702 123 8.830
2049 133.6 1110.216 0.065 71.732 123 7.947
2050 133.6 1110.216 0.058 64.559 123 7.152
2051 133.6 1110.216 0.052 58.103 123 6.437
2052 133.6 1110.216 0.047 52.293 123 5.793
2053 133.6 1110.216 0.042 47.063 123 5.214
2054 133.6 1110.216 0.038 42.357 123 4.693
2055 133.6 1110.216 0.034 38.121 123 4.223
2056 133.6 1110.216 0.031 34.309 123 3.801
2057 133.6 1110.216 0.028 30.878 123 3.421
2058 133.6 1110.216 0.025 27.790 123 3.079
2059 133.6 1110.216 0.023 25.011 123 2.771
2060 133.6 1110.216 0.020 22.510 123 2.494
2061 133.6 1110.216 0.018 20.259 123 2.245
2062 133.6 1110.216 0.016 18.233 123 2.020
2063 133.6 1110.216 0.015 16.410 123 1.818
2064 133.6 1110.216 0.013 14.769 123 1.636
2065 133.6 1110.216 0.012 13.292 123 1.473
2066 133.6 1110.216 0.011 11.963 123 1.325
2067 133.6 1110.216 0.010 10.767 123 1.193
29
2068 133.6 1110.216 0.009 9.690 123 1.074

2069 133.6 1110.216 0.008 8.721 123 0.966
2070 133.6 1110.216 0.007 7.849 123 0.870
Total 4708.476 521.649
30
International Journal of Economy, Energy and Environment

2021; 6(2): 35-45
http://www.sciencepublishinggroup.com/j/ijeee
doi: 10.11648/j.ijeee.20210602.13
ISSN: 2575-5013 (Print); ISSN: 2575-5021 (Online)
Cost-Benefit Analysis of Vishnugad-Pipalkoti

Hydro-Electricity Project
Bharat Jhunjhunwala
Formerly Assistant Professor, Indian Institute of Management, Bengaluru, India
Email address:
To cite this article:

Bharat Jhunjhunwala. Cost-Benefit Analysis of Vishnugad-Pipalkoti Hydro-Electricity Project. International Journal of Economy, Energy
and Environment. Vol. 6, No. 2, 2021, pp. 35-45. doi: 10.11648/j.ijeee.20210602.13
Received: March 24, 2021; Accepted: April 22, 2021; Published: April 30, 2021
Abstract: Hydroelectricity is often considered to be “clean” in view of less carbon emissions especially in comparison to
thermal power. However, hydropower is intrusive in the natural environment and has many environmental costs that may
outweigh the benefits from reduced carbon emissions. Hydroelectricity projects (HEPs) in India are required to submit a Cost-
Benefit Analysis (CBA) statement in the approval processes. However, the monetary value of the environmental costs is not
required to be calculated and not considered in the approval process. Thus, the projects are approved even if the costs are
greater than the benefits. The projects are required to submit an “Environment Management Plan” (EMP) to mitigate the
adverse environmental impacts. However, the proposals made in the EMP are inadequate to mitigate the impacts and are more
cosmetic than real. The calculation of monetary value of environmental impacts is resource intensive. This paper suggests that
proxy values can be used to arrive at an estimate. Ignoring the environmental costs because of absence of robust estimates is
tantamount to assuming that the environmental costs are zero which is not plausible. Taking the Vishnugad-Pipalkoti HEP as
an example, it is shown that the project overestimates the benefits and underestimates the costs. The Cost-Benefit Ratio (CBR)
is less than 1 irrespective of whether the environmental benefits and costs are included or excluded. The paper argues that
hydropower is not as green as often said to be.
Keywords: Hydroelectricity, Cost-Benefit Analysis, Environmental Costs, Environment Management Plan, Proxy Values,
Carbon Emissions
the Forest Conservation Act. This CBA is required to be

1. Introduction submitted when forest land is diverted for non-forest
1.1. Background purposes such as in the HEPs. The environmental costs in
this CBA are restricted to the direct costs of forests known as
Hydroelectricity is often considered to be “clean” in view Net Present Value of the ecological services of the forests.
of less carbon emissions especially in comparison to thermal Non-forest environmental impacts such as on biodiversity are
power. However, hydropower is intrusive in the natural not accounted in this CBA.
environment and has many environmental costs that are more The HEPs are required to submit an Environment Impact
frequently than not ignored. Assessment (EIA) statement to the Ministry of Environment,
The hydroelectricity projects (HEPs) in India are required Forest and Climate Change (MOEFCC). There is no
to submit a Cost-Benefit Analysis (CBA) statement in two requirement to submit a CBA along with this statement. The
statutory approval processes. Public Sector Undertakings are HEPs are also required to submit an Environment
required to submit a CBA to the Public Investment Board Management Plan (EMP) which sets out the measures the
(PIB) which vets it and then submits it to the Cabinet HEP will take to protect the environment. These measures are
Committee on Economic Affairs (CCEA) for approval of the theoretically proposed to mitigate the environmental impacts
public investment. This CBA only calculates the private costs assessed in the EIA. Certain financial outlays are proposed in
and benefits and entirely ignores the environment costs and the EMPs. It is then assumed that these outlays will fully
benefits. The second requirement to submit a CBA is under mitigate the environmental impacts although no monetary
31
36 Bharat Jhunjhunwala: Cost-Benefit Analysis of Vishnugad-Pipalkoti
value is placed on the environmental impacts. It is possible only in December 2013 and the project was rescheduled to be
that a negative environmental impact of Rs 100 may require completed, as per the promoter THDCIL Limited, in July
an expenditure of Rs 10 or Rs 1,000. Such an assessment is 2018. However, the Project could not be completed on this
not done. As a result, the policy makers have no inkling revised date and, at the time of writing, it was scheduled to
about the monetary value of the environmental impacts and be completed in December 2022 at a revised cost of Rs 43.97
whether the expenditures proposed in EMP fully mitigate or Billion.
compensate for the same. Finally, there is no requirement for
undertaking a comprehensive CBA that would include both 2. Benefits
the financial and environmental costs and benefits.
The calculation of environmental costs is resource 2.1. Consumption of Electricity
intensive. I had made a presentation before the Expert
Appraisal Committee of MOEFCC which recommends the 2.1.1. Peaking Power
issuance of an Environment Clearance. The Committee THDCIL has averred that “hydropower is used for peaking
appreciated the need for undertaking a comprehensive CBA purpose… Therefore, abandoning of VPHEP… is not in the
of a project. However, it said that this could not be required interest of the nation.” [1]
because it required considerable deployment of resources. The question of Peaking Power was raised in Public
This paper suggests that proxy values can be used to arrive at Investment Board (PIB) meeting in 2007 when investment in
an estimate. Ignoring the environmental costs because of VPHEP was approved by Government of India (GOI).
absence of robust estimates is tantamount to assuming that THDCIL had replied:
the environmental costs are zero which is not plausible. This Regarding the project being undertaken as a run of the
paper shows that it is possible to undertake a CBA with river project, he clarified that around 30 km long stretch of
nominal resources by using proxy values. We have National Highway from Tehri to Badrinath was getting
undertaken a CBA of the Vishnugad Pipalkoti HEP to submerged under the reservoir scheme; to avoid which, the
illustrate the possibility of undertaking a CBA with proxy location of the project was shifted by 2 km upstream and the
values. project was made a run of the river project. [2]
Thus, the project is not a peaking project and benefits
1.2. VPHEP cannot be claimed on this ground. There will be no
contribution of the project to grid stability.
The Vishnugad-Pipalkoti Hydro Electricity Project
(VPHEP) was given approval by the Cabinet Committee of 2.1.2. Consumption of Electricity
Economic Affairs of the Government of India (GOI) on The electricity produced by VPHEP will be supplied to
21.08.2008 to be completed at an expenditure of Rs 24.91 consumers who will benefit from its use. The average price
Billion. The Project as approved was to be completed in 54 of electricity on India Energy Exchange was Rs 3.38 per unit
months in 2013. However, the Forest Clearance for the in 2011-14 and Rs 3.07 per unit in 2015 -19:
diversion of forest land for non-forest purposes was obtained
Table 1. Price of Electricity on India Energy Exchange (IEX).
YEAR AVERAGE PEAKING PRICE NON-PEAKING PRICE

2011 3.56 4.19 3.35
2012 3.55 3.92 3.4
2013 2.82 3.14 2.72
2014 3.59 4.01 3.44
2015 2.81 3.12 2.71
2016 2.40 2.67 2.30
2017 3.01 3.60 2.82
2018 3.93 4.80 3.64
2019 3.20 3.92 2.96
Average (2011-14) 3.38 3.81 3.22
Average (2015-19) 3.07 3.62 2.88
The price has declined by Rs 0.31 per unit in the last five of the uncertainty involved, and assume that electricity will
years. We may assume it will continue to decline at the same be available on IEX at Rs 3.07 per unit in 2023-24.
rate to Rs 2.76 in 2023-24 when VPHEP is scheduled to be The Energy Research Institute has assessed that the
completed. However, we ignore this further decline because “Willingness to Pay” (WTP) is Rs 3.74 per unit: [3]
Table 2. WTP of Electricity.
Grid (actual) Grid (improved quality) Unit

1 Per day connected load 300 300 Watt
2 Monthly consumption 45 45 kWh
3 Monthly expenditure 168 290 Rs
4 Average tariff (3/2) 3.74 6.44 Rs/kWh
32
International Journal of Economy, Energy and Environment 2021; 6(2): 35-45 37
We take WTP for the present quality of supply at Rs 3.74 Benefit Analysis of the project.
per unit as being applicable for the electricity that would be The cost of electricity or the tariff likely to be approved by
produced by VPHEP. We do not take the higher WTP of 6.44 Central Electricity Regulatory Commission (CERC) is
per unit for improved quality of supply because the quality calculated as follows:
issue is solely of distribution and not relevant for the Cost-
Table 3. Likely Tariff.
Sl Item Unit Value Basis

1 Levelized Cost Rs/unit 3.92 CEA calculations supplied under RTI Act.
Debt-Equity Ratio is 70:30 as per VPHEP Progress Report of June 2019. Project cost is Rs 43.97 Billion.
Profit load on
2 Rs/unit 1.12 Equity component is Rs 13.19 Billion. CERC may add 14% return of equity=Rs 1.85 Billion/year. This will be
levelized cost
loaded on design energy of 1.657 Billion Units @ Rs 1.12 per unit.
3 Likely Tariff Rs/unit 5.04
The three critical values for assessment of benefits from the difference between the wages paid and the opportunity
the generation of electricity are as follows: cost of labour. However, we take the wages to be the benefit
Average Price of Electricity on IEX: Rs 3.07/unit to make a best-case scenario in favour of continuation of the
WTP for Electricity: Rs 3.74/unit project.
Likely tariff for VPHEP: Rs 5.04/unit
The benefit to the consumer is the difference between 2.5. Environmental Benefits: Carbon Emissions Saved
WTP and cost of supply. In the present case WTP is Rs 3.74 The major argument in favour of hydroelectricity is the
per unit while cost of supply from VPHEP is Rs 5.04 per unit. savings of carbon emissions. The carbon emissions from
Thus, the consumer will suffer a loss of Rs 1.97/unit. thermal power in India are estimated at 0.91 to 0.95 kg/kWh
The design energy is Rs 1.657 Billion units/year. Of this, or, say. 0.93 kg/kWh. [4] The value of carbon credit is
12 percent or 0.199 Billion units will be provided to state estimated at USD 20.11 per tonne or Rs 1508 per tonne at an
Government of Uttarakhand (GOUK) as royalty; and one exchange rate of Rs 75 per USD.[5] The benefits are
percent or 0.016 Billion units will be provided free for local calculated as follows.
area development. Remaining 1.442 Billion units will be
supplied to the buyers. The cost to the consumer from Design Energy=1.657 BU/year
VPHEP will be Rs 2.841 Billion/year (1.442 Billion units x
Carbon emissions saved=1.657 BU/year x 0.93
Rs 1.97 per unit).
kg/Unit=1.541 Million Tonne/year
2.2. Royalty and Local Area Development
Value of Carbon Saving=1.541 x 1508=Rs 2.324 Billion/year.
As said above, 12 percent or 0.199 Billion units will be
provided to GOUK as royalty; and one percent or 0.016 3. Costs
Billion units will be provided free for local area development.
These benefits are valued below. 3.1. Investment by THDCIL
Benefit to GOUK from Royalty 0.199 Billion units @ Rs
According to the Progress Report of the Project available on
3.07 being the price at which the same electricity is available
THDCIL website, THDCIL has submitted a revised cost
on IEX=Rs 0.611 Billion/year.
estimate of Rs 43.97 Billion in February 2019 to Ministry of
Benefit to local people on 0.016 Billion units @ Rs 3.07
Power. The debt component is serviced by Interest During
being the price at which the same electricity is available on
Construction (IDC) and included in the cost. The equity
IEX=Rs 0.049 Billion/year.
component of the project Rs 13.19 Billion is the investment
2.3. Profits of THDCIL made by THDCIL. The annualized cost of investment @ 10%
may be taken as Rs 1.319 Billion/year.
CERC is likely to provide for a return of 14% on the
equity component of Rs 13.19 Billion or Rs 1.847 3.2. Budgetary Support
Billion/year in fixation of the tariff.
GOI has approved a budgetary support of Rs 0.01 Billion
2.4. Employment per MW to Hydro Electricity Projects (HEPs) as informed by
Ministry of Power (MOP) under Right to Information Act.
THDCIL has stated in the Cost-Benefit statement filed GOI will have to pay and VPHEP will get Rs 4.40 Billion as
with MOEFCC under the Forest Conservation Act that budgetary support. It appears that the levelized tariff of Rs
employment of 2600 person for 5 years will take place. The 3.92 has been calculated after taking this support into account.
monetary value of benefits @ Rs 400 per man day on 300 The levelized tariff would be higher in absence of this
days per year is Rs 1.56 Billion. Annualized benefit @ 10% support. Since the levelized cost has been taken as calculated
will be Rs 0.156 Billion/year. Actually, the benefit would be by THDCIL, the payment by GOI embedded in achieving
33
this low levelized cost will be a cost to GOI or the economy. 3.4.2. EIA Admits of the Environmental Impacts
The annualized cost to GOI for providing this support @10% The Environment Impact Assessment (EIA) of the Project
will be Rs 0.44 Billion/year. acknowledges this:
The main disadvantage is that high sediment
3.3. Methodology for the Assessment of Environmental concentrations occur during flushing events with potential
Costs negative environmental effects downstream. As an example:
The Central Electricity Authority (CEA) which gives the the model simulations have shown that flushing for 2 days
license for the generation of electricity has averred in the with the radial gates fully open can recover 30 days of
Techno-Economic Concurrence granted to the project that an sedimentation during a “mean monsoon” period. This implies
amount of Rs 0.76 Billion has been provided in the Revised that the concentration – as an order of magnitude estimate –
Cost Estimates towards Environment and Ecology. It is will be 15 (=30 divided by 2) times larger than the natural
implied that all the environmental costs are compensated by sediment concentration in the river for the same discharge
this amount. In this section we shall try to arrive at the (EIA Summary Page 11).
monetary values of the environmental impacts and show that 3.4.3. Confirmation from Other Studies
the amounts allocated in Environment Management Plan Trapping of sediments in reservoirs makes the water ‘clean’
(EMP) do not address these impacts at all. at times that the sediment is trapped. During these times the
We provide additional evidence from three studies of water downstream has higher capacity to absorb sediment.
HEPs in India to assess the level and, where possible, help These sediment-free waters undertake a cutting action on the
arrive at the monetary value of these impacts: riverbed downstream. Patrick McCully, in his study of dams
Study of 3 HEPs namely Maneri Bhali 1 and Maneri Bhali titled Silenced Rivers, tells us “Clear water below a dam is
2 (both in operation) and Loharinagpala (now abandoned) in said to be ‘hungry’: it will seek to recapture its sediment load
Uttarakhand under a Project from Ministry of Environment, by eroding the bed and banks of the river… Over time, all the
Forests and Climate Change (MOEFCC). [6] This is referred easily erodible material on the riverbed below the dam will
to as “Negi Study.” This study gives people’s perception of eventually be removed, and the bed will become ‘armoured’
the impacts without making any monetary calculations. with rocks…” [9] This leads to more erosion downstream.
Study of Purulia Pump Storage Project in West Bengal by Proof of deprivation of sediment in both storage- and
Chakrabarty and others. [7] This is referred to as barrage type ROR dams is available from the Negi and
“Chakrabarty Study.” This study has made monetary Jhunjhunwala studies.
calculation of certain environmental impacts. They have been
used as benchmarks with appropriate caveats due to the Table 4. Negi Study: People’s Perception of Soil Erosion (Responses in
different nature of the VPHEP. Percent of Respondents).
Study of 3 HEPs of Uttarakhand by the present author. Sl Impacts Increase Decrease Stable/Do not know
This study undertook survey of people living near the Maneri 15 Soil Erosion 59.3 3.3 37.4
Bhali 1 and Tehri HEPs on the Bhagirathi and the Chilla HEP
on the Ganga in Uttarakhand.[8] This is referred to as Table 5. Jhunjhunwala Study. Question: Is there more or less sediment in the
“Jhunjhunwala Study.” This study has given people’s water downstream of dam? (Responses in numbers in affirmative as a ratio
of total numbers of respondents).
perception and also made monetary calculations of the value
of environmental impacts for the reservoir-based Kotlibhel Sl No Item Net, HEP-wise Impact
1B HEP which is different from the tunnel-based VPHEP. We 1 Chilla Reduced 1/9=(-) 11%
2 Maneri Reduced 1/4=(-) 25%
have used the information from this study after making
3 Tehri Reduced 1/6=(-) 17%
changes for the different nature of VPHEP. 4 Average Reduced (-) 18%
We now calculate the monetary value of the environmental
impacts of VPHEP with this preliminary statement. Negi has averred that the impact on soil erosion does not
have a relationship with the HEP. We ignore this remark
3.4. Soil Erosion due to Modified Water Release
because the EIA of the project points to the occurrence of
3.4.1. Brief Description of the Environmental Impact such an impact and the same is confirmed by the
The Project will make a small reservoir to divert water into Jhunjhunwala study.
tunnel for transporting it to the power station. The silt will be 3.4.4. Calculation of Costs
flushed periodically. The silt will gush out in large amounts
A study of disasters in Uttarakhand by Sajwan and others
at this time. It is not clear whether the river can carry this
has assessed the contribution of rivers to landslides though it
sudden gush of silt or it will be precipitated and left
has not assessed the contribution of HEPs to the same.[10]
somewhere below the dam. Just as butter taken out of milk,
We have assessed the contribution of the Project by adducing
when reintroduced into the same milk does not create the
additional data and making certain assumptions.
same taste and texture, similarly, trapping and then flushing
of sediment may not recreate the earlier balance of sediments.
34
Table 6. Cost of Erosion.
Sl Item Cost Basis

Land loss due to landslides and
246642 Ha in
1 disasters in Uttarakhand 2010-2013, Table 1 of Sajwan Study.
4 years.
4 years.
Land loss due to erosion triggered by 83660 Ha in 4 33.92% of above as assessed by Sajwan: “Majority of landslides in this area (33.92%)
2
erosion by rivers, 4 years. years. are observed to be triggered by bank erosion by rivers and tributaries.”
Land loss due to erosion triggered by 108.7 Ha in 4 We made telephonic inquiry with three experts as to how much of this erosion could be
3
accentuation of erosion by HEPs. years. attributed to HEPs. The average value of the three estimates was 0.13 percent.
The accentuation at Line 3 is due to 7 HEPs (Maneri Bhali 1 and 2, Tehri, Koteshwar,
Erosion attributed pro-rata to VPHEP, 18.1 Ha in 4 Vishnu Prayag, Srinagar and Chilla). The total capacity of these 7 Projects is 2670 MW
4
4 years. years. (90, 306, 1000, 400, 400, 330 and 144 MW respectively). The VPHEP is of 444 MW.
Thus, we assess the erosion on pro-rata basis (108.7 x 444/2670).
Erosion attributed pro-rata to VPHEP, 4.5 Ha per
5 Divide by 4 to arrive at annual contribution.
Annual year
37 crore per
6 Value of Land Lost, annual 4.5 Ha=45,000 sqm X Circle Rate Rs 8236 (Rural area Chamoli)
year
3.4.5. EMP Provisions Are Inadequate 3.5.2. EIA Admits of Environmental Impacts
The EMP provides an amount of Rs 61 lakhs for Green The EIA says:
Belt development (Annexure 4.19.1. E). The green belt will 6.3 Landslide In the study area very high hazard zone (VHH)
be made in the Project Area. It may marginally reduce the are located along the valley of riverbed, in the Patal Ganga and
erosion in the project area. It will not help prevent erosion in Birahi Ganga area where old landslide and rock debris are
the entire stretch of the river as assessed by Sajwan. accumulated and along the escarpment of Karmnasa river.
Moderate hazard zones are present in the north of Dungri,
3.5. Damage to Houses Due to Blasting around Kiruli, Gadora and around Baimru area. Low hazard
3.5.1. Brief Description of the Environmental Impact and very low hazardous area are mainly restricted to cultivated
The Project is tunnel based. Blasting is done in the fields, alpine zone and in the area with gentle slope with good
mountains to make these tunnels. This destabilizes the vegetated cover. The dam and surge shaft area come under the
hillsides leading to high incidence of landslides and greater low hazardous zone while the TRT outfall area come under the
havoc during earthquakes. Village Jamak on the rim of moderate hazardous zone. Slope stabilization techniques
Maneri Bhali barrage was deeply affected during the 1992 including engineering and vegetative measures are provided in
Uttarkashi earthquake. The hillside had been destabilized detail in EMP (EIA Summary Page 11).
during blasting and the village virtually collapsed when 3.5.3. Additional Evidence
struck by a natural earthquake. Reportedly 85 persons died in Studies by Negi and Jhunjhunwala confirm the occurrence
this village. of this impact.
Table 7. Negi Study: People’s Perception of Landslides (Responses in Percent of Respondents).
Sl Impacts Increase Decrease Stable Do not know

15 Landslides 52.3 4.3 43.3 0
Table 8. Jhunjhunwala Study. Question: Have houses developed cracks etc. after construction of dam? (Responses in numbers in affirmative as a ratio of total
numbers of respondents)).
Sl No Item Net, HEP-wise Impact

1 Chilla No impact 0/19=0%
2 Maneri Yes 6/13=(+) 46%
3 Tehri Yes 15/32=(+) 47%
4 Average Yes=(+) 31%
We ignore the assessment by Negi that increased erosion quality and improvement of aesthetic view of the area.”
does not have connection with HEPs because the statement in There is no plan to even stabilize the slopes of the affected
EIA points to such an impact and the same is confirmed by villages and no recognition of the impacts of blasting which
the Jhunjhunwala study. is different than slope stabilization.
3.5.4. Calculation of Costs 3.6. Quality of Water
We make an assessment of this cost below.
3.6.1. Brief Description of the Environmental Impact
3.5.5. EMP Provisions are Inadequate Project will not store water for long periods. Yet it will
The EMP says: “Plantation along the 4 approach roads and negatively impact the quality of its waters for the following
colony area will be carried to maintain slope stabilization, air reasons:
35
River is converted into reservoir with lower level of prana Waters are deprived of chemicals
Waters are deprived of oxygen
Table 9. Cost of Damage to Houses During Construction.
Sl No Item Amount Basis

Number of families living in the villages
1 1223 Households EIA Summary Page 25.
affected by Project
2 Total value of houses of affected families. Rs 2.45 Billion Assume Rs 2 Million per house.
Value of houses likely to be affected due to According to survey by Jhunjhunwala Study quoted above there is a
3 Rs 0.758 Billion
landslides 31 percent chance of houses developing crack etc. due to dams.
We assume the cos of repairs and reduction in value of the house to be
50 percent of the value of the house. This may be an undervaluation
4 Cost of damage of houses Rs 0.379 Billion
because the negative impacts of blasting on water sources and
landslides is not calculated separately and subsumed in this cost.
5 Add costs due to trauma Rs 0.379 Billion Assume equal to Line 5.
6 Total One-time cost Rs 0.758 Billion Line 5 + 6.
7 Total Annualized cost Rs 0.076 Billion Per Year
Another reason for decline of quality of water is loss of

3.6.2. EIA Admits of Environmental Impacts cellular memory. It appears the waters of River Ganga have
The EIA admits an impact on Water Quality: special spiritual powers. People from across the country
7.2 Water Quality Issue: The average discharge in the river come to this river to take bath and to immerse the ashes of
at dam site is 182.7 m3/s… Low flow of the order of 35 m3/s their dead. The secret of this quality may lie in cellular
occurs in the river in the month of January, February and memory. Lord Mahaveer says that water can feel pain and
March… There is likely impact on the flow downstream i.e., pleasure though it cannot express or act upon it. It is possible
point of diversion to tunnel to point till water is released in to that molecules of the waters of the Ganga imbibe certain
the main river. This may impact on water quality, water memory as they flow beside the Brahma Kapali Shila and
usages downstream and so on aquatic life especially during temple of Bhagwan Badri Vishal at Badrinath, temple of
lean periods i.e., December to February. To address the flow, Mother Ganga at Gangotri and thousands of ashrams on the
aquatic and aesthetic requirement managed river flow banks of these rivers where monks are doing penance
suggests a minimum of 3 cumecs water to be made available continually. The water is purified at a very deep level just as
in the stretch downstream of dam to [Tail Race Tunnel] TRT a smile by the mother removes millions of tensions from the
outfall where water diverted at intake will re-join the main mind of the child. This deep memory provides peace to the
river course. This is critical only to the stretch between the pilgrims when they take bath in these waters or carry it in
dam to 2.69 km downstream of the dam (that too in lean bottles to their home. This cellular memory will be weakened
period) as beyond this point there are four to five tributaries by impounding water in reservoirs, force-flowing it through
joining the main river which contribute to the main river flow. tunnels and it crashing against the turbine blades.
3.6.3. Additional Evidence The negative impact is confirmed by Negi and
Waters of the Ganga River appear to have special chemical Jhunjhunwala studies:
quality. In a study of Alaknanda River, Ahoy Kumar Singh and Table 10. Negi Study; (Responses in Percent of Respondents).
Syed I. Hasnain of School of Environmental Sciences, Jawaharlal
Nehru University says: “a relatively high contribution of (Ca+Mg) Sl Impacts Increase Decrease Stable Do not know
9 Water Pollution 92.0 0 8.0 0
to the total cations (TZ+) and high (Ca+Mg)/(Na+K) ratio indicate
that the carbonate weathering could be the primary source of the Table 11. Jhunjhunwala Study: Was the water of river fit for drinking
major ions to these waters.” [11] previously? What is the condition now? (Responses in numbers in as a ratio
A study by National Environment Engineering Research of total numbers of respondents)).
Institute (NEERI) indicates that Ganga may have small
Sl No Item Net, HEP-wise Impact
amount of beneficent radioactivity: The study titled “Self- 1 Chilla Reduced 10/20=(-) 50%
Purification Capacity of River Bhagirathi: Impact of Tehri 2 Maneri Reduced 3/13=(-) 23%
Dam,” says: “Quantification of U3O8, ThO2 and percent of 3 Tehri Reduced 28/32=(-) 88%
K in sediment samples and comparison of these parameters 4 Average (-) 54%
with those present in other river sediment samples and
Table 12. Jhunjhunwala Study: What is the change in smell of water
freshwater lake sediment samples showed that
downstream? (Responses in numbers in as a ratio of total numbers of
Bhagirathi/Ganga sediments, collected between Grouch and respondents)).
Rishikesh, were more radioactive than those collected from
some of the aquatic bodies in Central India.”[12] Sl No Item Net, HEP-wise Impact
1 Chilla (-) 11/20=55%
The beneficent elements are absorbed by the river water 2 Maneri (-) 2/13=15%
when they rub against the stones. This rubbing will be much 3 Tehri (-) 25/32=78%
reduced in the length of the tunnel. 4 Average (-) 58%
36
3.6.4. Calculation of Costs beneficent chemicals or the loss of cellular memory.

Murty has estimated that the economic cost of water
pollution to the country is 1.73 to 2.1 percent, or median 1.9% 3.7. Air Pollution
of GDP.[13] 3.7.1. Brief Description of the Environmental Impact
The District Domestic Product of District Chamoli was Rs The creation of air- and noise pollution during construction
57.31 Billion for the year 2016-17.[14] It would be about Rs activities leads to health problems for the residents, livestock
66.34 Billion in 2019-20 (@5% increase per year). The cost and vegetation.
of water pollution in the district is assessed at 1.9% or Rs
1.26 Billion per year. 3.7.2. EIA Admits of Environmental Impacts
It could be questioned whether all of this is due to Project. The EIA recognizes the creation of pollution from the
Indeed the contribution to “pollution” by Project may be very Project during construction:
little. However, there is much contribution to the loss of Indirect impacts will be due to various construction
water quality due to the loss of beneficent chemicals and loss activities such as generation of dust due to earthwork,
of cellular memory that is not tantamount to “pollution.” It excavation, transportation of construction materials (sand
must be noted that Alaknanda is the main tributary of the aggregate, cement etc.), quarry, crusher & blasting operations,
Ganga. However, on the conservative side we take 1/3rd of air pollution due to movement of construction vehicles,
this value at Rs 0.42 Billion per year. equipment and machineries, influx of labour population and
pollution generated through provision of labour camps
3.6.5. EMP Provisions are Grossly Inadequate established temporarily at construction sites etc. These
The EMP provides for an expenditure of Rs 0.02 Billion impacts will be limited to the construction period (EIA
on muck disposal plan (Page 160 Item C). Proper disposal of Summary Page 22).
muck does not reduce the impact of less absorption of
3.7.3. Additional Evidence
Table 13. Negi Study (Responses in Percent of Respondents).
Sl Impacts Increase % Decrease % Stable/Do Not Know % Net %

1 Air Pollution 78 2 21 (+) 76
2 Noise Pollution 69 3 28 (+) 66
We must report that Negi does not impute these impacts to The cost of air- and noise pollution during construction of
the HEPs. However, we consider these to be due to HEPs in the Purulia Pump Storage Project has been calculated by
view of the EIA of VPHEP admitting to the occurrence of Chakrabarty at Rs 2.009 Billion. However, the Project
these impacts. descriptions of Purulia and VPHEP are different:
3.7.4. Calculation of Costs
Table 14. Parameters of VPHEP and Purulia Projects
Sl Project Capacity (MW) Reservoirs (Numbers) Head (meters) Tunnel (Km) Submergence (Million M3)
1 VPHEP 444 1 237 16.5 (HRT + TRT) NA (will be less)
2 Purulia 900 2 133 1.7 13.49
3 VPHEP % Purulia (-) 49% (-) 50% (+) 78% (+) 870% NA
The air and sound pollution take place during the Capacity Building (Para 4.19.1. L) and Rs 2 lakhs for
movement of vehicles during construction. The construction equipment of air monitoring (Para 4.19.1. M). Needless to
activity at VPHEP is less due to less capacity and less say such monitoring does not eliminate the costs associated
numbers of reservoirs. On the other hand, it is more because with air- and noise pollution.
of higher head and length of tunnel. It is not possible to
assess the impact of each of these differences on air and 3.8. Biodiversity: Flora, Fauna and Fish Diversity
sound pollution. Thus, we take the air and sound pollution to 3.8.1. Brief Description of the Environmental Impact
be proportional to the cost of the Project which is similar at Biodiversity is an economic resource for future. The ability
Rs 24.91 Billion and 24.76 Billion for VPHEP and Purulia of living beings to adjust to changing climatic factors
respectively. Chakrabarty has assessed the one-time health depends upon availability of diversity. It is possible that one
costs at Rs 2.009 Billion. We take this same figure for variety of, say, black pepper, which provides huge economic
VPHEP. Accordingly, the annualized cost @10% is assessed returns today, is unable to withstand the rise in climatic
at 0.2 Billion/year. temperatures. In absence of biodiversity, humankind will be
3.7.5. EMP Provisions are Inadequate deprived of pepper in future. However, other varieties of
The EMP provides an amount of Rs 500 thousand for pepper may be able to withstand such increase in
37
temperatures. These resistant varieties may not be profitable fall in vulnerable category as per IUCN Red list. However
today. Thus, it is important to conserve such varieties as a these species are common in India (EIA Summary Page 16).
resource for future even though they are not profitable today. Himalayan Musk Deer, Goral, Leopard, Brown bear and
The World Commission on Dams (WCD) which was Wild Boar are reported in Project Influence Area… The
supported, among others, by Ministry of Water Resources, project activities are likely to disturb the normal peace of the
GOI; International Hydropower Association (representing wildlife and they are likely to move in other areas (EIA
hydropower companies); Asian Development Bank and Summary Page 16-17).
World Bank has said that over 60 percent of the Projects Indirect impacts (on flora) will be due to various
studied indicated that “impeding passage of migratory fish construction activities (EIA Summary Page 17).
species” was a significant impact of the dams.[15] The WCD There is likely impact on the flow downstream… This may
quoted another study suggesting that the loss of free-flowing impact on… aquatic life especially during lean periods (EIA
river habitat due to making of reservoirs had led to 55% of Summary Page 19).
the human-induced species loss. A further 19% was caused …two important species of Mahseer (Tor tor and Tor
by dams acting as barriers to fish migration. putitora) are present in the Alaknanda River downstream the
dam site of VPHEP. These species are endangered and
3.8.2. EIA Admits of Environmental Impacts migratory in nature…. The other species Schizothoraichthys
The EIA of Project has acknowledged the impact on progastus and Pseudecheneis sulcatus are vulnerable in their
biodiversity. We are giving below limited extracts to ecological status which has their presence in the project area
highlight the existence of the impacts and we have not given (EIA Summary Page 19).
various averments underplaying the same impacts in the EIA. There are some specific pockets of riparian vegetation in
Our purpose here is to place a monetary value on the likely the Alaknanda River and its tributaries especially the Birahi
impact. For this, the existence of impact is important; not the River, a considerable riparian vegetation cover is present
possibility of less impact taking place. which provides conducive habitat for fish… The dam
The project… touches the boundary of the transition zone construction will block the local movement of the species
at the dam site (EIA Summary Page 14). Schizothorax (Snow trout) (EIA Summary Page 19).
Three herb species Berginia ligulata (Silpara), Hedychium
spicatum (Ban Haldi) and Thalictrum foliolosum (Mamiri) 3.8.3. Additional Evidence
are reported in the forest area near Maina adit. These species The negative impact is confirmed by the Negi Study.
Table 15. Negi Study: Impact on Biodiversity (Responses in Percent of Respondents).
Sl Impacts Increase Decrease Stable/Don’t Know Net

1 Abundance of wildlife 15.3 47.6 37 (-) 32.3
2 Flora/Fauna 4.6 69.6 25.6 (-) 65
3 Habitat Fragmentation 33.3 36.0 30.6 (-) 2.7
4 Invasive species 49.0 14.3 36.6 (-) 34.7
5 Diversity of fish 43.7 33.7 22.7 (-) 10.0
Negi denies relation of “abundance of wildlife” with HEPs. Our assessment, however, is that these may be due to the
VPHEP as noted in the EIA.
Jhunjhunwala Study confirms the occurrence of these impacts:
Table 16. Jhunjhunwala Study: Did any trees, plants, butterfly, insects, animals, birds or fish exist previously that have now become extinct? (Responses in
numbers as a ratio of total numbers of respondents).
Sl No Item HEP-wise Impact

1 Chilla Less 4/19=(-) 21%
2 Maneri Less 3/11=(-) 38%
3 Tehri No change 0/26=0%
4 Combined Less 7/56=(-) 20%
Table 17. Value of Biodiversity.
si Study Description Value (Participants) Value (India)

Annamalai Tiger Reserve Rs 6.5/year India citizen (assume 1
1 Eco-tourism related externalities Rs 656/year per tourist
[16] percent)
Willingness to pay for spending time for Rs 6003/year per Rs 60/year for India household (assume 1
2 Maldari, India [17]
participatory elephant conservation agricultural household percent) or Rs 12/citizen/year.
Khangchendonga National Improvement in environment Rs 137 per domestic Rs 13.7/year for India citizen (assume 1
3
Park, Sikkim [18] conservation visitor percent)
have been able to access following studies in South Asia

3.8.4. Calculation of Costs regarding such valuation:
The valuation of the impact on biodiversity is difficult. We
38
These values of Rs 6.5, Rs 12 and Rs 13.7 per citizen are the free-flowing river:
for specific ecological zones. The VPHEP is located on the The abovementioned impacts have been assessed on the
Ganga River which is the National River of the country and people residing near the rivers. These are given here only to
may be considered to be equivalent to a wildlife reserve. We show that such impacts do take place.
take the lower of these as the benchmark value. We arrive at Needless to say, these impacts would also affect the people
the monetary value of biodiversity lost due to the Project as: of the entire country—both who visit the area and those who
Number of Households, India, 2011: 0.247 Billion do not. That is, even though one does not derive direct
Number of Households, India, 2019: 0.272 Billion benefits from bathing or carrying waters, yet one likes the
Value of Biodiversity Loss: Rs 6 per household/year free-flowing river just as one likes the sun shining outside the
Monetary Value of Biodiversity Loss: Rs 1.632 room even though one does not bask in the sunlight.
Billion/year
Table 18. Jhunjhunwala Study: Do you like flowing river in contrast to a
3.8.5. EMP Provisions are Inadequate reservoir or canal?(Responses in numbers as a ratio of total numbers of
The EMP provides for an expenditure of Rs 0.066 Billion respondents)).
under the head “Bio Diversity Management Plan” (Para Sl No HEP Net Impact
4.19.1. A). However, most of the expenditure is on 1 Chilla 16/19=(+) 84%
developing an herbal garden, roadside afforestation and 2 Maneri 12/14=(+) 79%
3 Tehri 31/32=(+) 97%
compensatory afforestation. These activities do not help
4 Combined (+) 87%
conserve the threatened flora.
Under “wildlife protection” the only activities proposed 3.9.4. Calculation of Costs
are monitoring and awareness creation. The impacts on Economists have developed the method of ‘willingness to
aquatic and terrestrial biodiversity are not mitigated by pay’ (WTP) to assess monetary value of such intangible
monitoring. benefits. People as asked how much they would be willing to
I recollect reading that the area is home to the endangered pay for the specified result.
Cheer Pheasant. The EIA (Executive Summary) and EMP are IIT Roorkee has estimated the non-use value of free flow
silent on this species. of Ganga River:
The non-use value for the state of Uttarakhand by using
3.9. Aesthetic Value and Reverence of the River
regression output is Rs. 232554420610.35. According to
3.9.1. Brief Description of the Environmental Impact 2011 census of India, population of Uttarakhand is 10086292.
The flowing river has a beauty that provides happiness to Therefore, WTP for a citizen of Uttarakhand comes to be Rs
the people—who live near the river, who travel to the area 23,056.
and those who never come to the area. The latter is known as Extrapolating this data for the country level WTP is Rs
non-use value of the flow of the river. This beauty of the 1172.00 per citizen.[19]
flowing river is lost by making a dam. Part of the river is Conservatively, we assume this applies to a household
converted into a reservoir; and part is diverted into a tunnel rather than a citizen.
with only e-flows being released. The total length of Ganga River is 2525 kilometres. The
length of 18 tributaries of Ganga is 3638 kilometres. Total
3.9.2. EIA Admits of Environmental Impacts length for Ganga including the tributaries is 6163 kilometres.
The EIA implies that there is a loss of aesthetic value Of this, 16.5 kilometres or 0.27 percent will be affected by
without explicitly stating the same: VPHEP. Accordingly, the non-use value lost by Project will
To address the flow, aquatic and aesthetic requirement be 1172 x 0.27%=Rs 3.16 per household per year.
managed river flow suggests a minimum of 3 cumecs water Another (higher) estimate is made by Jhunjhunwala:
to be made available… (EIA Executive Summary Page 18).
E-flows, even if enhanced to 20-30 percent as per the GOI Table 19. Question: “How much annual price you are willing to pay for
Notification of October 2018, do not still capture the welfare restoring free flow of water in the river?” (Responses in numbers in
affirmative as a ratio of total numbers of respondents)).
obtained from uninterrupted flow and the also does not
eliminate the welfare lost due to the conversion of the Sl No Name of HEP HEP-wise Rupees per year
flowing river into a reservoir. 1 Chilla, n=12 71
2 Maneri, n=13 136
3.9.3. Additional Evidence 3 Tehri, n=32 20
4 Average 76
The Negi Study has brought out the negative impacts of
the HEPs on the aesthetic and cultural values. Net 84 percent This value of Rs 76 per person/household per year is given
say there is decline in the aesthetic beauty of the River, net
by people living near the rivers for the particular project. The
41 percent say that there is reduction in reverence to the
value for people of the country may be more or may be less.
River and net 41 percent say there is reduction in
We conservatively take the lower value of Rs 3.16 per
participation in the religious festivals. Negi says these
household arrived at on the basis of IIT Roorkee study.
impacts are related to HEPs.
Indeed the remnant loss after the release of e-flows would be
Jhunjhunwala study reports that 87 percent people liked
39
less. However, we consider that this reduction is nullified by Cost incurred in immersing the ashes of the dead in free-
our using the much lower value of Rs 3.16 per household flowing water.
against the higher value of Rs 76 suggested by Jhunjhunwala. Loss of fishing
The total cost is calculated thus: Drying of water springs and increase in woman’s burden
Number of Households, India, 2011: 0.247 Billion Cost of negative acculturation.
Number of Households, India, 2019: 0.272 Billion We have ignored these costs for the present calculation.
Value of Non-Use Value Lost: Rs 3.16 per household/year The total monetary value of the environmental costs
Value of Non-Use Value Lost (Total): Rs 0.859 calculated above are summarized below.
Billion/year
Table 20. Summary of Monetary Value of Environmental Costs.
3.9.5. EMP Provisions are Inadequate Sl No Impact Cost Rs Billion/year
The EMP says that the release of e-flows will mitigate the 1 Soil Erosion 0.37
loss of aesthetic value. We may record here that the e-flows 2 Damage to Houses due to Blasting 0.076
have been increased from the 3 cumecs indicated in the EMP 3 Quality of water 0.42
to 20-30% or about 55 cumecs now. There will be some 4 Air Pollution 0.20
5 Biodiversity 1.632
mitigation in the sense that no stretch of the river will go dry.
6 Aesthetic value 0.859
However, the aesthetic value will continue to be lost by the 7 Total 3.557
dam and due to the less-than-natural flows in the river.
3.10. Total Environmental Costs 4. Cost-Benefit Analysis
Other costs that we have not calculated to keep this paper The costs and benefits are summarized below.
brief are as follows:
Value of forests not covered in NPV
Loss of sand and stones to local people.
Table 21. CBR of the Project.
Costs (Rs Benefits (Rs Cost-Benefit

Sl No Item
Billion/year) Billion/year) Ratio
1 Royalty @12% of Electricity 0.611
2 Local Area Development 0.049
3 Consumer cost for purchasing electricity at a higher price: 144.2 crore units @ Rs 1.97 2.841
4 Profits of THDCIL 1.847
5 Employment 0.156
6 Project cost annualized 1.319
7 Budgetary Support annualized 0.44
8 CBR Excluding Environmental Benefits and Costs 4.60 2.663 0.58
9 Environmental Benefits: Carbon Emissions saved 2.324
10 Environmental Cost 3.557
11 CBR Including Environmental Benefits and Costs 8.157 4.987 0.61
The Cost-Benefit Ratio is less than 1 irrespective of

whether the environmental costs are excluded or included.
Yet, the project has been approved by the statutory References
authorities with the assumption that CBR is greater than 1.
[1] Letter No 14-11/14/2019-H-I dated 20.12.2019 from Ministry
of Power (MOP).
5. Conclusions
[2] Para 5.3 Page 32 Minutes of PIB dated 26.2.2007.
This study underscores the need for undertaking a
[3] Gill, Bigsna, et al., Electricity Pricing and the Willingness to
comprehensive CBA of any project by using the best Pay for Electricity in India: Current Understanding and the
available proxy values rather than not undertaking the Way Forward, The Energy and Resources Institute, 2017.
analysis at all.
There is a need for the Environment Management Plans to [4] Moti L. Mittal, Hemendra Sharma and Richa Singh,”
Estimates of Emissions from Coal Fired Thermal Power
re-state the impacts as outlined in the Environment Impact Plants in India,”
Assessment and then outline how those specific impacts will https://www.researchgate.net/publication/267687877_Estimat
be or will not be mitigated. The EMP of the Project must es_of_Emissions_from_Coal_Fired_Thermal_Power_Plants_i
connect with the admitted impacts and show their adequacy n_India, Retrieved March 22, 2021.
or inadequacy. [5] Reed Shapiro, “Value of Carbon Market Update 2020,”
There is a need to revisit the idea that hydroelectricity is Carbon Credit Capital, https://carboncreditcapital.com/value-
“green” because it has less carbon emissions. of-carbon-market-update-2020/, Retrieved March 22, 2021.
40
[6] Negi, GCS and Disha Punetha, People’s perception on impacts [13] Murty, M. N. and Surender Kumar, Water Pollution in India:
of hydro-power Projects in Bhagirathi river valley, India, An Economic Appraisal, India Infrastructure Report 2011,
Environ Monit Assess (2017) 189: 138. Table 19.2, Page 289.
[7] Chakrabarty, Abhishek and Soumendu Chatterjee, [14] Directorate of Economics & Statistics, Estimates of District
Geoinformatics in Environmental Cost Assessment of Purulia Domestic Product of Uttarakhand (2011-12 to 2016-17 with
Pumped Storage Project-West Bengal, Indian Journal of Base Year, 2011-12), Dehradun.
Geography and Environment, Volume 11, 2010.
[15] World Commission on Dams, Thematic Review,
[8] Jhunjhunwala, Bharat, Economics of Hydropower, Kalpaz, Environmental Issues II. 2, Workshop on Dam Reservoirs and
New Delhi 2009. Greenhouse Gases, Part III, February 24 & 25, 2000, Hydro-
Quebec, Montreal, Final Minutes, Page 82.
[9] McCully, Patrick, Silenced Rivers: The Ecology and Politics
of Large Dams, Orient Longman, Hyderabad, 1998. [16] Surendran, A and C Sekar, An economic analysis of
willingness to pay (WTP) for conserving the biodiversity,
[10] Sajwan KS and Sushil K, “A Geological Appraisal of Slope International Journal of Social Economics, July 2010.
Instability in Upper Alaknanda Valley, Uttarakhand Himalaya,
India,” Journal of Geology & Geophysics, 2016, 5: 5. [17] Ninan, K N, The Economics of Biodiversity Conservation:
Valuation in Tropical Forest.
[11] Singh (1998), Abhay Kumar and Syed I. Hasnain, “Major ion
chemistry and weathering control in a high-altitude basin: [18] Maharana, Iyatta, S. C. Rai & E. Sharma, “Environmental
Alaknanda River, Garhwal Himalaya, India,” Himalayan economics of the Khangchendzonga National Park in the
Glacier Project, School of Environmental Sciences, Jawaharlal Sikkim Himalaya, India,” Geo Journal 50, 329–337 (2000).
Nehru University, New Delhi, Hydrological Sciences—
Journal—des Sciences Hydrologiques, 43 (6). [19] Agarwal, Rajat, Non-use values for River Ganga, Draft Report,
January 2020, IIT Roorkee.
[12] NEERI (2004), Self-Purification Capacity of River Bhagirathi:
Impact of Tehri Dam, Annual Report 2003-04.
41
8.10.2019
Vishnugad-Pipalkoti Hydro Electric Project

(VPHEP): Economic Assessment
Bharat Jhunjhunwala, Former Professor, IIM Bengaluru, bharatjj@gmail.com
P S Sharda, Advocate, Supreme Court, P S Sharda, pssharda@hotmail.com
1 Electricity Cost @ Rs 6.42 is Prohibitive
The VPHEP was granted Techno-economic Clearance (TEC) by the Central
Electricity Authority (CEA) on 21.09.2006 at a project cost of Rs 2,128 crores
for a design energy of 1813 million units.1 The specified date of commissioning
was 54 months from the clearance of Cabinet Committee on Economics Affairs
(CCEA) which was granted in August 2008. Therefore, the date of
commissioning as per TEC was 01.10.2008 +4.5years or 31.03.2013.2
The CCEA granted approval to the project in August 2008 at a project cost of
2,491 crores. The approved project cost by CCEA was higher than the approved
project cost by CEA which was Rs 2,128.8 crores. Therefore, the TEC became
invalid because the cost parameters had changed which the CEA is mandated to
take into account u/s 8 of the Electricity Act.3 Even otherwise the TEC was
issued without complete compliance with mandate of section 8 of the Electricity
Act, 2003 and not at all flagged by any other agency involved.
In May 2017 THDC submitted a revised cost estimate of Rs 3,789 crores to
Ministry of Power.4 It appears that Ministry of Power (MoP) has not taken any
action on this proposal and by default allowed the cost escalation to continue.
In February 2019 THDC submitted another revised cost estimate of Rs 4,397
crores.5 The design energy was also reduced from the 1813 million units in TEC
to 1657 million units.6 These proposals of THDCIL for enhancement of the cost
and reduction of design energy have not been decided by the Ministry of Power.
1
TEC specifies US $ 1.3 million + Rs 2031 Crores. We have taken the exchange rate at Rs 72 per $ as
prevailing at present.
2
Annexure 1 page 1 for cost, page 10 for design energy, page 4 para 6 for date of commissioning.
3
Annexure 2 page 23 para 3.0 gives details of CEA approval.
4
Annexure 2, page 23, Para 3.0.
5
Annexure 2, Page 24 Para 3.
6
Annexure 1 page 10 for original design energy; Annexure 2, page 23, para 1.0 for reduced design energy.
42
The Ministry of Power has informed that any proposal for VPHEP has not been
submitted to PIB or CCEA after 1.1.2017.7
The THDC has filed a cost benefit analysis with ministry of Environment and
Forest (MoEF) approximately in 2006 for obtaining clearance under the Forest
Conservation Act. This statement shows a project cost of Rs 2,096 crores and
the design energy of 1813 million units which is same as the design energy
specified in the TEC. The cost of electricity produced from the project is
specified of Rs. 2.26 per unit in this statement.8 We ignore the minor difference
in the project cost of Rs 2,096 crores as per CBA and Rs 2,128 crores as per
TEC. Therefore, the cost of electricity produced from VPHEP would be Rs.
2.26 per unit at the project cost of Rs 2,128 Crore (TEC) and design energy of
1813 MU (TEC/CBA).
The cost of electricity produced by VPHEP will increase in the same proportion
as the cost of the project increases and the design energy declines. The most
recent revised cost estimate is Rs 4,397 crores and revised design energy is
1657 MU. On pro-rata basis the cost of electricity produced comes to Rs. 5.10
per unit. (2.26*4397/2128*1813/1657).
The VPHEP project originally provided for release of 15.65 cumecs as E-
Flows.9 In October 2018, the Ministry of Jal Shakti has specified that the under-
construction projects will be require to release 20 – 30% environmental flows.
This will be increased to 53.4 cumecs at an average 25% E-Flows.10 Therefore,
the generation of electricity will be further reduced from 1657 million units to
1336 million units and correspondingly the cost of electricity produced will
increase from Rs. 5.10 per unit to Rs.6.42 per unit. The detail calculations are
given in the footnote.11 Accordingly, the cost of electricity after releasing 25%
E-Flows comes to Rs. 6.42 per unit.
7
Annexure 3.
8
Annexure 4 page 1, Item 1 and page 2, Item 1.
9
Annexure 2, page 1.
10
Annexure 5, Page 30-31, Table 3.7.4 it gives the average flow at VPHEP site.
11
E-flows. The Project is to produce 1657 MU at release of 15.65 Cumecs e-flows (Annexure 190600 Page 1
for e-flows; page 23, para 1.0 and 3.0 for design energy). The average flow in Alaknanda River at Dam Site
during the last 10 years of which data is given in the EIA of VPHP is 213.5 cumecs (Annexure 090000 EIA
Page 30 Table 3.7.4). Therefore:
Average Flow in Alaknanda River: 213.5 cumecs
Flow available for generation after 15.65 Cumecs e-flows: 180.1 cumecs
Generation from 180.1 cumecs flow: 1657 MU
43
The progress report of THDC says that 12% of free electricity will be provided
to the Government of Uttarakhand and 1% of electricity for local area
development.12 The balance 87% electricity will be sold to the consumers. The
cost of the electricity sold to the consumer will be increased in the proportion to
the reduction of the saleable energy. The production price of saleable electricity
will be Rs 6.60 per unit (5.74*100/87).
The average price of peaking electricity on India Energy Exchange was 3.81 per
unit in 2011-14 and 3.62 per unit in 2015 -19 which shows a declining trend of
Rs 0.038 paise per year:
PEAKING NON-PEAKING
YEAR AVERAGE PRICE PRICE
2011 3.56 4.19 3.35
2012 3.55 3.92 3.4
2013 2.82 3.14 2.72
2014 3.59 4.01 3.44
2015 2.81 3.12 2.71
2016 2.40 2.67 2.30
2017 3.01 3.60 2.82
2018 3.93 4.80 3.64
2019 3.20 3.92 2.96
AVG (2011-14) 3.38 3.81 3.22
AVG (2015-19) 3.07 3.62 2.88
Therefore, the price of peaking power on IEX is likely to be Rs. 3.50 in 2022
when VPHEP will commissioned (3.62-0.038*3). This means that the electricity
which is available at Rs. 3.50 per unit on the IEX will be produced by VPHEP
at a price of Rs. 6.60 per unit. The consumer will pay an additional cost of Rs.
3.10 per unit on the 87% electricity sold to him. The additional burden of this
GOI has notified release of 20/25/30% e-flows in October 2018. Taking average of 25%, the release will be 53.4
cumecs. The flow available for electricity generation will be 160.1 cumecs (213.5 – 53.4). Therefore:
Generation after release of 25% e-flows = (1657/180.1*160.1) = 1472 MU
The cost of electricity at flow of 180.1 cumecs and generation of 1657 MU is Rs 5.10 per unit as calculated
above. This will increase in the same proportion as the generation reduces from 1657 MU to 1472 MU due to
the release of enhanced e-flows:
Cost of electricity (5.10*1657/1472) = Rs 5.74 per unit.
12
Annexure 2, Page 23 Para 1.
44
high price electricity on consumer will be Rs 3,550 crores as its discounted

present value.13
The additional investment required to complete the VPHEP will be Rs. 2606
crores.14 Accordingly, the total burden is calculated as follows:
1 Burden due to increase on cost of construction = Rs 2,606 Crores
2 Additional burden on the consumer = Rs 3,550 Crores
3 Total burden including on consumer = Rs 6,156 Crores
Conclusion: The burden on the economy of completing the VPHEP will be
Rs. 6,156 crores while the cost of abandoning the project will be only Rs
1,791 crores being the amount spent till date.
Cost Escalations due to Delay in Commissioning the Project

The TEC provides that VPHEP will be commissioned in 54 months from the
approval of CCEA, which was granted in August 2008. However, the Forest
Clearance was issued on 28.5.2013.15 Therefore, we may take (without
prejudice) the stipulated date of commissioning as 54 months from 1.6.2013 i.e.,
the project ought to have been commissioned on 31.11.2018.
In March 2019, the THDCIL submitted revised project cost of Rs 4,397 Crores
to MoP and said that it is likely to commission the project on 31.12.2022.16 This
enables us to assess the rate of progress of the project:
Sl Date of Specified Date of Remarks
Announcement Commissioning
1 1.6.2013 31.11.2018 54 months from issue of Forest
Clearance on 29.5.2013.
2 28.2.2019 31.12.2022 Revised Cost Estimates submitted
on 28.2.2019 specifying date of
commissioning as 31.12.2022.
3 68 months 49 months Time elapsed (Row 2 – Row 1) =
0.72 month delay for each month
elapsed.
13
Annexure 6.
14
Rs 4,397 projected cost less Rs 1,791 spent till July 2019 Annexure 2 Page 27 Para 8.0.
15
Annexure 2 Page 23 Para 2.0 Item 8.
16
Annexure 2, 27 Para 9.0.
45
From 1.6.2013 (being the date of start of work) to 28.2.2019 (being the date of
specifying the revised cost estimate of Rs 4,397 crore), that is, over a period of
68 months, the date of commissioning has been shifted back by 49 months from
31.11.2018 to 31.12.2022. This means that for every month elapsed, the date of
commissioning is delayed by 0.72 months (49/68). Or, for every month elapsed,
only 0.28 part of that month’s specified and committed work is getting done.
THDCIL states that the project will take another 41 months from 28.2.2019 to
31.12.2022 to commission. Given the past record we may assume that the work
will proceed as it has been proceeding till now i.e. the project will be
commissioned in about 146 months from 28.2.2019 (41 months/0.28 work done
in every month = 146 months or 12 years).
Now we can assess the likely cost escalations till the time of commissioning on
the same basis. The increase in cost of project is calculated as follows:
Sl Date of Specified Cost of Remarks
Announcement Project (Rs
crores)
1 1.6.2013 2491 CCEA Clearance in August 2008
on the basis of which THDC started
work on 1.6.2013.
2 28.2.2019 4397 Revised Cost Estimates submitted
on 28.2.2019.
3 68 months 1906 Increased Cost (Row 2 – Row 1) =
Rs 28 crore per month for each
month elapsed.
The project is likely to be commissioned in 146 months. The increase in cost at

Rs 28 Crores per month will add up to Rs 4,088 Crores.
We now calculate the cost of the project as follows:
1 Burden due to increase in specified cost of
construction and burden on the consumer = Rs 6,156 Crores
2 Additional burden due to cost increase

as per present rate of progress = Rs 4,088 Crores
3 Total burden including cost increase as per

present rate of progress = Rs 10,244 Crores
46
Conclusion: The burden on the economy of completing the VPHEP

including cost increase as per present rate of progress will be Rs. 10,244
crores while the cost of abandoning the project will be only Rs 1,791 crores
being the amount spent till date.
Environmental Cost
A study of the Purulia Pump Storage Project has estimated the environmental
cost of the Pump Storage Hydropower Project to be conservatively 7.6 times
direct cost borne by the developer.17
The Niti Ayog (erstwhile Planning Commission) has said that various
environmental costs should be accounted in working out the cost of a project.18
The projected cost of VPHEP is Rs 4,397 Crores. Applying the ratio of
environmental cost as assessed conservatively in the Purulia study, the total cost
of VPHEP including environmental cost is estimated at Rs 33,417 Crores
(4397*7.6). Accordingly the burden on the economy is calculated (even at
conservative level) as follows:
1 Burden including cost increase as per
present rate of progress = Rs 10,244 Crores
2 Additional burden due to environment = Rs 33,417 Crores
4 Total burden including environment = Rs 43,661 Crores
Conclusion: The total burden of completing VPHEP inclusive of cost
increase as per present rate of progress and environmental cost will be Rs
43,661 Crores while the cost of abandoning the project will be only Rs
1,791 Crores.
17
Total cost of Purulia, Rs 5,819 crore, direct cost of Purulia, Rs 764 Crores. Ratio of Total/Direct Cost = 7.6
times, Annexure 7 Page 16, Para 5.
18
Annexure 8.

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1

Dr. Bharat Jhunjhunwala, PhD (Food and Resource Economics,

Sub: PIB/CCEA Clearance for Additional Public Investment in

By way of this letter, I seek to bring to your kind attention that

The commissioning at February 2031 is likely since only 15

1. Electricity at Rs 9.55 per unit

The THDC has filed a cost benefit analysis with Ministry of

2. Electricity at Rs 11.81 per unit due to e-flows

The above estimates have been made at e-flows of 15.65 cumecs

I have published a paper in the International Journal of Economy,

crore on the economy Annexure 7. The total cost of the project

4. Burden on the economy

The long-term price of base electricity on IEX is about Rs 3.50 per

I have ignored the benefits due to profits of THDCIL and

5. The case for decommissioning

The present expenditure on the project is Rs 2271 crores at July

decommissioning is Rs 4708 crores as calculated above; and Rs

I have to request you to kindly consider these submissions before

I may mention that I had submitted a similar representation to

I take the liberty of drawing your kind attention that the

Sachinanda Pandey v. State of West Bengal (1987) 2

State shall endeavour to protect and improve the environment

Indian Handicrafts Emporium v. Union of India, (2003) 7

to have compassion for living creatures. The amendments

Dr. Bharat Jhunjhunwala

Annexure 1: Estimated Cost and Delays

below – Row above)

Months added to date

Months added to date

(From Column 3, Row

VPHEP was granted Techno-economic Clearance (TEC) by the Central Electricity

below – Row above)

Cost increase per 12

Total cost as per

(From Column 2==,

(From Column 3, Row

Annexure 2: 15 percent progress till date

VISHNUGAD PIPALKOTI HEP (444 MW)

Vishnugad-Pipalkoti Hydro Electric Project (4x111 MW) is a run-of-the-river scheme. It

2.0 PROJECT APPROVALS

3.0 REVISED COST ESTIMATE

 Memorandum of changes (MOC) have been cleared from different Directorates of

4.0 MAJOR WORKS

5.0 PROJECT FUNDING

6.0 PRELIMINARY PROJECT WORKS:

Rehabilitation & Resettlement:

requisite 31.639 Ha. of Private Land across 7 Villages. Around 94% of

 The Public Information Center (PIC) established at Gulabkoti is since functional.

1. Design Review Consultancy:

2. Civil works and Hydro - Mechanical works :

The structure wise progress is placed at Exhibit - V.

 Model testing of Turbine has been completed.

Balance Design and Engineering is in progress.

8.0 EXPENDITURE ON THE PROJECT:

9.0 COMMISSIONING SCHEDULE:

10.0 Issue to be Resolved:

VISHNUGAD PIPALKOTI HEP (444 MW)

Vishnugad-Pipalkoti Hydro Electric Project (4x111 MW) is a run-of-the-river scheme. It

3.0 REVISED COST ESTIMATE