Environmental minefield

16 November 2001

As environment law becomes restrictive and the government (prodded by judicial courts) contemplates rigid implementation, project developers in India face long and costly planning battles. I M Sahai reports

INDIA has one of the highest hydro power potentials in the world - estimated at about 150,000MW. Even at 60% load factor, that comes to almost 90,000MW. However, the total installed capacity in the country remains at around 25,000MW, less than 30% of its actual potential. A hydro:non-hydro ratio of 25:75 in installed capacity means that much-needed peaking generation, required to mitigate a current 13% peak-time shortage, is not available.

India's population crossed the billion-mark last year. That and rapid economic development is claiming forested land all over the country. The resulting ecological imbalance has created concern among environmentalists and the Supreme Court. As the leading developer of hydro projects in India, the federal-owned National Hydroelectric Power Corporation (NHPC) is in a good position to highlight major environmental issues facing the hydro sector.

According to chairman and managing director, Y Prasad, these issues are:

• Procedures adopted for site clearance, environment and forest clearances.

• Small portions of national parks/wildlife sanctuaries becoming submerged or affected by a project.

• Acquisition of land by the respective state governments for projects.

• No uniform policy for relief and rehabilitation (R&R) of oustees.

• Size of area to be treated under catchment area treatment (CAT).

In a way, these issues are interrelated. Environmental approval is mandatory before any survey and investigation, land acquisition, pre-construction and construction relating to a project is undertaken. This procedure continues to be cumbersome despite difficulties being brought to the notice of government.

Approval for small projects approval is delegated to the state government, while larger projects involve a two-stage process which requires federal government involvement. The nodal authority is the federal Ministry of Environment and Forests (MoEF). A check with the latter reveals that even though the approval authority for certain types of thermal power projects had been delegated by it to state governments some years back, for hydro projects no such delegation has been made or even contemplated. Moreover, even though on paper time limits are prescribed for according such approvals, they are hardly ever adhered to, with no accountability for delay.

Site approval

Gaining approval for the site poses its own problems. Until January 1994, a developer was required to intimate only the location to MoEF. Since then, the latter has prescribed a cumbersome two-part procedure for clearance. According to the new procedure, preliminary site approval is accorded on the basis of existing data. The developer may then proceed with survey and investigations and prepare a pre-feasibility report. At the second stage, final approval would be accorded after considering the survey data. This two-stage process has, in practice, turned out to be time-consuming because of the depth of information sought from the developer at each stage.

Environmental approval is given on the basis of an impact assessment study and environment management plan. A project can be turned down if it covers even a small portion of a national park or wildlife sanctuary. This is the result of illegal and unplanned deforestation, which has led to the declaration of more areas as 'protected'.

Compensatory afforestation and catchment-area treatment are other issues. The policy regarding the former is now outdated: the same principles are applied by government whether a hydro project is big or small. Then again, maybe due to the paucity of available land in the project area, new trees have to be planted in distant parts of the state where the project authorities may have no administrative machinery in existence for implementation or supervision. This does not satisfy the locals as they see their own tree-cover and timber being cut, while another set of people living far away would stand to gain in the future. Catchment-area treatment involves identification of degraded/vulnerable areas, and subsequent biological and engineering treatment measures. While big utilities like NHPC have done this, it has been suggested that for hydro developers in general, such action ought to be taken up on a centralised basis by a separate authority and the costs charged to the beneficiaries.

Two cases

The following examples illustrate how environmental considerations, real or created, could hold up a project. NHPC's Chairman Y Prasad says that the 710MW, Koel Karo project in Bihar had been put back by a long delay in land acquisition. The latest hurdle is political opposition to the displacement of tribals from the project sites and command area. The project envisages regulation of the waters of South Koel and North Karo rivers in the recently-created state of Jharkhand in India's eastern region. The project comprises construction of an earthen dam (1.96km long and 44m high) across South Koel, and another such dam (2.45km long and 55m high) across North Karo. Power would be generated from four 172.5MW units in an underground power-house, and from one 20MW unit at a neighbouring surface power house.

The project had been gestating for the last two decades. MoEF gave it environmental approval in June 1982 and forestry approval in July 1990. The federal government gave the project the go-ahead in November 1991. However, even pre-project work was held up due to lack of funds, land acquisition delays and local opposition.

The project is located in the south Bihar plateau inhabited largely by tribals, and local politicians have held it up as an example of apathy towards their problems by the state and federal governments. In the hydro policy of the latter announced in August 1998, Koel-Karo project was promised federal funds. In November 2000, a new tribal-dominated state of Jharkhand was created, covering south Bihar. That gave further impetus to the earlier agitation fanned by local politicians. Jharkhand state government promised to review the project and even though it would be the biggest hydro project to come to fruition in the new state, it is not clear as to when it will get the green light.

The trials of the second project are well-documented. Throughout its 20-year history, the 1000MW Tehri stage I dam and power project in Uttar Pradesh (now located in the new state of Uttaranchal) to India's north, has endured continuing local opposition on ecological and seismic grounds. Now in its concluding stages and likely to be completed by the year 2003, a problem has arisen which could further delay Tehri's commissioning. To take power from the project, federally-owned Power Grid Corporation intends to lay two 800kV transmission lines to the northern plains. As that would require deforestation, the company has begun compensatory afforestation in designated areas. A protest has been revived at Tehri to stop trees being cut on ecological grounds. The new planting has been derided on the grounds that it was done miles away in another state (Uttar Pradesh). Unless this transmission project is completed in time, the power project at Tehri (and downstream at Koteshwar, work on which is to start) will stand unutilised even when completed.

Acquiring land for a project is not an easy task, since most land in India is privately-owned. Even though acquisition laws have 'emergent' provisions, these can be bypassed by land owners in different ways, including possible procurement of 'stay-orders' from the courts. Opposition to a project by locals may add to the difficulties. Other problems are non-availability of land records, disputes by unauthorised persons, resistance by environmental groups, and pressure for high compensation for property acquired.

Resettlement and rehabilitation

Many major projects of recent years in India have grappled with the issues of resettlement and rehabilitation (R&R). The federal government once gave guidelines to the state governments (which had to bear the brunt of such tussles) for the preparation of R&R plans. More recently, states have been asked to work out their own solutions looking at the local conditions. That has led to populist formulae evolving at the expense of the developers. R&R is not confined merely to moving oustees from one place to the other.

In a big project like the Sardar Sarovar, the R&R plan has comprised: cash compensation, a new residential site, subsistence allowance, land subsidy, agricultural land, and money for developing the new land. In addition, provision in the plan has been made for community services such as a primary school, drinking water-wells, a piped water supply, a children's park, a health centre, street lighting, tree platforms, approach roads and internal paths. The raising of Sardar Sarovar dam at each stage has been made conditional on the R&R plan being executed to the satisfaction of the concerned government authorities. And the Save Narmada Movement activists have been telling all and sundry that despite the reports to the contrary, the R&R plans have neither been formulated nor implemented in a correct manner.

Creation of state-level authority

As much of the delay in gaining government approvals takes place at the state level, one solution could be to tackle environment and related issues in a centralised manner. The Indian Government thought as much and, in the revised policy on hydro power development in the country, announced in August, 1998:

'The acquisition of requisite government, forest and private land involves following a cumbersome procedure and difficult negotiations with land owners. Demands for employment in lieu of the land cost, land for land at places of land owner's choice, etc. has resulted in contractual problems for several projects. There is, therefore, a need that project authorities are insulated from the problems arising out of land acquisition and R&R. It will be the responsibility of the state government to acquire the land (government/private/forest) for the project and also negotiate at its own terms with land owners as per the policy adopted by respective state governments. Similarly, all the issues of resettlement and rehabilitation associated with projects have to be addressed by state government. The state government may consider the creation of special authorities to address the problems of land acquisition and R&R for all infrastructure projects. In the case of very large projects, the project-specific authorities may be created not only for land acquisition and R&R but for the comprehensive development of the area, including the catchment area. The project developer may not be involved in the execution and implementation of works by these authorities but will be required to contribute towards funding their plans. All such costs incurred by the developer shall be considered as cost to the project and allowed to be passed through tariff.'

The foregoing represented an eminently sensible solution to the issue. In the past, leaving the developer to do all the leg-work had never resolved anything. This was seen even in the big projects like Sardar Sarovar or Tehri Dam where separate new entities had been set up to execute the projects. It only resulted in creating difficulties for the developer and occasionally scaring them away. However, the federal Power Ministry has revealed that even though the policy is over three years' old, none of the states have implemented it.

In the meantime, the Power Ministry has decided to create a separate entity at a federal level to jointly undertake afforestation and environmental measures. Along the lines of a special purpose vehicle, it would be set up together by certain federal power utilities such as National Thermal Power Corporation to:

• Undertake fruitful channelling of investments by the member-utilities to increase the national forest cover.

• Identify suitable land for afforestation for power-projects of the member-utilities through MoEF which, in turn, would coordinate action with the state and district authorities.

• Facilitate fast procurement of forest clearance for the forest-land proposed to be acquired by the member-utilities for their future projects.

• Interact with MoEF to score off the necessary compensatory afforestation required for the projects of member-utilities, which need diversion of forest-land.

• While setting up such an entity may ease the problems of its member-utilities, it is not clear how it would benefit non-members such as the private developers.

Interview with Y Prasad, chairman and managing director of NHPC

Q) How do environment issues affect Indian hydro projects? A) Environmental and forestry clearances are mandatory requirements for undertaking survey and investigation, land acquisition, pre-construction and construction activities of the projects. Although time-limits are been fixed by MOEF for processing and giving the clearances, these are not adhered to. As per the EIA notification of 27 January 1994, only the location of the project site is to be intimated to MOEF. However, now site-clearance is being given in two stages, for which exhaustive questionnaires have been prepared by MOEF, a time-consuming process. Additional studies are sometimes asked for, which are not specified in MOEF’s guidelines. Sometimes an insignificant portion of wildlife sanctuary or national park becomes a matter of concern, which may lead to abandoning the project. Acquisition of private land involves cumbersome procedures and difficult negotiations with land-owners to part with their land. Sufficient time is lost in land-acquisition. Liberalisation of R&R packages by state government, after the start of the project, may increase the cost of the project abnormally. Q)NHPC is taking up two big projects in Arunachal Pradesh. Do you expect similar problems there? A)Yes Q)What solutions do you suggest to these problems, in general? A) MOEF should give site clearance in line with EIA Notification. MOEF must have available data with respect to ecologically sensitive areas like biosphere reserves, national parks etc. In case a project involves some insignificant portion of the buffer zone of a national park or sanctuary, not affecting the wildlife, the project should be further considered and not abandoned on this account. Catchment area treatment works in general should be taken up as a national programme by a separate authority and charged to various beneficiary sectors. At project cost it should be restricted to the reservoir rim.

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