India’s hydro hold-ups10 September 1999
India has huge hydro potential, but it can take up to 20 years to get projects approved. IM Sahai* investigates the causes for delay and what, if anything, the authorities are doing about it
India has a hydroelectric potential of around 84,000MW (at 60% load factor) but, for various reasons, only 22% has been realised through completed projects and those under development. The Indian government, in its August 1998 policy document on hydro development, noted: ‘The share of hydro power has been continuously declining during the last three decades...from 44% in 1970 to 25% in 1998. The ideal hydro-thermal mix (in generation) should be in the ratio of 40:60.’
A major constraint, and reason for delays, in India’s hydro power development has been ecological factors. In extreme forms, this leads to adversarial positions being taken by the developer, the project-affected people and the government.
In a typical scenario, the developer points to unrealistic environmental law and rules, delays in getting government approvals, obstructive tactics by oustees, litigation and an unsympathetic attitude by the authorities. The oustees, often backed by non-governmental organisations (NGOs), feel that in a rush to get the project on the ground, the developer frequently connives with local authorities by not allowing their concerns to be heard.
The government points to inadequate project preparation by the developer as the reason for delay. Common criticisms include: inappropriate siting, widespread deforestation, the displacement of large communities and inadequate resettlement and rehabilitation (R&R) plans which remove the oustees from their traditional livelihood and can push them into strange surroundings. The developer is often accused of taking ecological short-cuts which, in due course, lead to more obstacles.
Robert Goodland of the World Bank, writing three years ago, felt that hydro had such a poor reputation, merited or not, that it must become environmentally sustainable or the industry would languish and the world would be worse off in the urgently-needed transition to renewable energy.
Areas of concern
Goodland suggested that there were some areas of concern when determining the environmental sustainability of hydro reservoirs: resettlement, sedimentation, fish, biodiversity, land, water quality, greenhouse gas production, downstream hydrology and regional integration. Even in third world countries, ignoring these points could become counter-productive and turn popular feelings against hydro. Moreover, some of the important criteria, like forest maintenance, due regard for the project-affected population, or conformity with the environmental laws and regional integration, are essential parts of sustainable development which both the hydro power developer and government need to uphold at all times.
A major environmental issue in India’s hydro power development has been its appetite for forest land, especially in hilly and sub-mountainous areas. Deforestation for any use is frowned upon by a federal government concerned about dwindling forest cover, and this stance is backed by India’s Supreme Court.
One of the conditions laid down in Indian forest conservation law is the provision of compensatory afforestation. This states that for all projects requiring the destruction of forest land, an equivalent area of non-forest land has to be forested — next to or as close as possible to an existing forest (to allow for effective management of the newly-planted area). This provision applies to all hydro projects. It raises the problem of afforestation having to be carried out by the project developer miles away from the site, due to non-forest land not being available any closer.
Another problem is that the law does not distinguish between project sizes, and treats large, medium and small hydro projects similarly. This is unsurprising as the procedure for getting government approval has not been simplified over the years and remains cumbersome. For usage of forest land up to 5ha, the clearance is given at state level and between 5-20ha (as in small hydro schemes) at regional level. However, for areas larger than 20ha, as in the siting of medium and large hydro projects, the case comes through the state government to the federal government, where an advisory committee considers it and gives its recommendation to the Federal Ministry of Environment and Forests for a final decision. This takes months and, if an environmental lobby group gets into the act, years. Delay also takes place in cases where, at any stage of consideration, the project developer is asked to redesign the project to make it more ecologically acceptable, or to furnish alternative proposals or additional information to the authorities.
The Tehri project
The most difficult issue for hydro promoters is R&R of oustees. Ideally, the number of displacements should be kept low and relocation should place individuals in better circumstances (as is reportedly done in Brazil and in some cases in China). However in India, with a population reaching the one billion mark, there are very few tracts with a low population density. Moreover, in the past, public sector utilities have pushed through their big hydro projects at the expense of the welfare of oustees.
The oldest major hydro project still under construction in India is the 1000MW (4x250) Tehri (Stage-I) in the state of Uttar Pradesh. It was sanctioned in June 1972 for a 600MW capacity (which was changed to 1000MW in March 1994 by raising the design capacity of each unit from 150MW to 250MW). The project was entrusted to THDC, a new public sector utility, with federal and state governments sharing its equity. As per the original schedule, the project was to have been completed by 1982: it is now expected to generate power only by 2002. The 20-year delay had several reasons, including: design changes, an end to Russian aid (after the break-up of the USSR) and a shortage of funds. However, a major cause has been prolonged agitation by an environmental lobby of locals, backed by some NGOs, citing ecological damage by the project; an alleged fault in the resettlement and rehabilitation package; and apprehension of a seismic disaster following any future major earthquake. More than one review by known, independent experts has been done, over the years, to rule out seismic damage from the project. For R&R, a whole new town was built on high ground near the project for those whose homes would be submerged by the new reservoir, and cash compensation disbursed.
Federal approval was given to the Tehri project from an ecological angle. However, as vested interests have developed against the project, it continues to be opposed by a section of the population, more so as construction at site has picked up.
Narmada river development
Another project frustrated by delays is that to utilise the Narmada for irrigation and power. Narmada is a major Indian river flowing through its central region, having its origin in Madhya Pradesh, and flowing into the sea off the coast of Gujarat. A major multi-purpose dam project on the river after it enters Gujarat, was initiated by the state government through a new state-owned company. Dubbed the Sardar Sarovar project, it was meant to benefit three states, with a 1450MW power component comprising two powerhouses, a riverbed station of 1200MW (6x200MW) and a canalhead station of 250MW (5x50MW).
Sanctioned in October 1988, the two powerhouses were to have been commissioned by 1995. Financial assistance was to have come from the World Bank and Japan’s Overseas Economic Cooperation Fund (OECF), which was duly sanctioned. However, a people’s movement called Narmada Bachao Andolan (Save Narmada Agitation, NBA) was built up by a section of environmentalists to oppose the project on ecological and resettlement grounds. After prolonged agitation, the matter reached India’s Supreme Court in April 1995 where it is still pending.
The Court, in February this year, allowed dam construction to resume, raising the height from the present 80.3m to 85m (the design height is 146.5m). The court also asked a panel headed by a retired judge to review the progress of implementation of the resettlement package. NBA is still agitating and risks being hauled up for contempt of court (see p6). In the meantime, the 250MW canalhead powerhouse has been completed but cannot be commissioned until the main dam is raised to a minimum level of 110.63m and water begins to flow.
The 1200MW riverbed powerhouse has been delayed by a 1992 dispute between the project company and Japan’s Sumitomo which was to supply the six generating units. The supply resumed only this year and the power station is expected to be commissioned progressively from December 2002 onwards. As NBA has found fault with the implementation of the resettlement package by the concerned state governments, it remains to be seen as to how and when the embroglio will be resolved.
NBA’s agitation has not remained confined to Sardar Sarovar, but has extended to similar small and medium projects upstream on the Narmada, in Madhya Pradesh. Most of these projects have still to take off and NBA reached an agreement with the state government in April 1999 to suspend its agitation on the condition that the latter reviews these projects from various angles, including resettlement. However, NBA made it clear that it would continue to protest against the 400MW Maheshwar project, also on Narmada in Madhya Pradesh, and promoted by S Kumars of India with Bayernwerk and VIEW of Germany as partners. NBA has carried out sit-ins opposing the project, whose construction is well behind schedule, for alleged defects in its resettlement plan and in the project’s cost (IWP&DC, February 1998, pp 18-19). Maheshwar is the biggest IPP hydroelectric project being developed in India. This trouble over what ought to be a good, reasonable and just R&R plan, could be reduced if the federal government were to come up with a model plan and circulate it among all concerned.
The Indian government has taken note of how some environmental and related problems have delayed development of hydro power in the country. In the new policy on hydro power development, announced in August 1998, it said: ‘There is a need that project authorities are insulated from the problems arising out of land acquisition and resettlement and rehabilitation. It will be the responsibility of the state government to acquire the land (government, private or forest) for the project and also negotiate at its own terms with landowners according to the policy adopted by respective state governments. Similarly, all the issues of R&R and rehabilitation associated with projects have to be addressed by the state government. State governments may consider forming authorities to address the problems of land acquisition and resettlement for all infrastructure projects. In the case of mega projects, project-specific authorities may be created not only for land acquisition and resettle-ment, but for development of the wider catchment area as well. 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 to tariff.’
Such a policy suggestion is no doubt reasonable and helpful and its implementation could be taken up by the individual project developer with the state government. However, it remains to be seen whether the latter, on its own, takes a proactive role in such issues, which tend to have grass-root political implications. It is relevant to note that a year after the policy was announced, no state government has taken steps to implement these portions of the policy, as was admitted by sources in India’s Ministry of Power.
The August 1998 policy, otherwise a fairly comprehensive document, is silent on the delay encountered by hydro project developers in obtaining clearance from environment and forest authorities to project proposals. This delay is faced not only by IPPs but also by government-owned utilities, whether federal or state. Chairman and managing director of the government-owned National Hydroelectric Power Corporation, Y Prasad, expressed his exasperation in public last March at the number of projects of his own utility which were being delayed because of the time taken to get approval from the Ministry of Environment and Forests. The solution offered in the policy is that for any hydro power project which is meant to be offered for private participation, the central or state utility (as the case may be) should itself do all the pre-project work, including obtaining various clearances. The project could then be offered to an IPP for sole or joint participation.
This, however, does not take into account the difficulties encountered by the utility itself, like NHPC, in getting the various government approvals. Also, while in April 1997 the federal government delegated power to state governments to give environmental approval to certain types of thermal power projects, it has still kept for itself the power for clearing hydro projects. The latter thus have still to go through the two-stage process, whereby first the state government recommends the project and then the federal government decides on the case, after its panel of environmental experts has gone through the project proposal on its merits.
The federal government has taken certain steps which are likely to reduce the conflict with green groups. One is the (long overdue) establishment of an institutional mechanism whereby the voice of the latter could be heard. Under an April 1997 notification, federal government has provided for a mandatory public hearing at local level, as a part of environment assessment of the project. On receipt of a project proposal, an executive summary of it would be made available for comments and objections, within 30 days, to the concerned parties such as local citizens, non-government organisations and municipal bodies. Their views would be considered by a government-nominated panel, which would give its recommendation to the state government on whether to send the project proposal to the federal government for approval or not. The other step has been the setting-up, in August 1997, of a quasi-judicial body called the National Environment Appellate Authority (NEAA).
Located in New Delhi, NEAA, headed by a retired judge and comprising up to four members with expertise on the subject, hears appeals in cases where the federal government has given environmental approval to a project. The appellants could be any of the affected persons including NGOs. Strict time limits have been laid down for the various stages of the appellate process, along with stiff penalties for non-compliance with NEAA’s orders. This step ought to reduce the tendency of local people and NGOs to rush to law courts for environmental litigation. However, where the clearance for a project has been refused either by the federal government or later by NEAA, the project developer himself can knock on the doors of the appropriate court.
A third step by the federal government, also now under way, is the formulation of a manual for Environment Impact Assessments. EIA has been one of the weak points in most developing countries, including India. The impact assessment by the project authorities is too dependent on the knowledge and integrity of the consultant deployed for the purpose — as is the review of that assessment by the various government functionaries. A 1997 report by the National Environmental Engineering Research Institute (NEERI) in India, looking into certain EIA cases, found the institutions entrusted with the task to be ‘lacking in skills, objectivity, transparency and accountability’.
To rectify this, NEERI suggested the setting-up of a federal entity which would review the respective functions and responsibilities of federal and state agencies, and formulate guidelines for a speedy and effective EIA. While the federal government did not agree to the suggestion of creating such an entity, it initiated a project, with financial assistance from the Manila-based Asian Development Bank, to strengthen EIAs and environmental legislation. The project involves preparation of an EIA manual and training of technical personnel in its use. The project, which is due for completion this year, would also provide input for more effective legislation and strengthening of environmental institutions, based on the experience of other countries.
The Federal Ministry of Environment and Forests is also preparing a comprehensive National Policy on Environment. As part of that process, it will firstly publish a white paper on the subject to elicit public debate, and use the feedback in formulating the policy. As India is going through federal elections in September-October 1999, this action is likely to spill over to the next year, after the new government takes charge.
While the government, both at federal and state levels, has come forward to resolve some of the environmental issues facing a hydro power developer in India, more needs to be done in the areas still considered weak, like the project-approval process. In doing this, all the three major players — the developer, the government, and the affected persons/ NGOs — will have to take a more pos-itive look at their respective roles. Examples in various parts of the world have shown that development can take place without being in conflict with the environment.