Friday, October 26, 2007

Arunachal Pradesh Small Hydro Power Policy-2007

The State Government has promulgated a new hydro policy called Small Hydro Power Policy-2007, to develop around 2000 MW of hydro power from small hydro projects to be built by private developers under Build Own Operate and Transfer (BOOT) basis. Under this policy, hydro power projects of capacity ranging from 1kW to 25 MW would be taken up. Some of the salient features of this policy are:

Processing fee: No processing fee would be required for projects between 1kW to 1MW. However, for projects above 1 MW but below 5 MW an amount of INR 25,000/- would be charged as processing fee. INR 30,000/- would be charged for projects from 5 MW to 10 MW whereas for projects above 10 MW and upto 25 MW the processing fee would be INR 50,000/-

Free Power: Those private developers undertaking the projects under this policy has to provide ‘free power’ to the state at the rate of 5 percent for projects from 1 kW to 5 MW and at the rate of 8 percent for projects between 5 MW to 25 MW. However, the local developers are exempted from this free power to the state for projects up to 5MW. There would be concession on free power for 3 years for project between 1 kW to 5 MW, 2 years for projects from 5 MW to 10 MW and 1 year for project above 10 MW.

Transmission Lines: The developers has to lay it’s own transmission line to feed the state grid from their power house.

Revenue: Revenue would be collected by the developers from the villagers where their power is fed.

Selection of Developer’s: Through a 'single window' selection system with high level selection committee constituted by the state government. After 30 days of selection of the developer, MoU (Memorandum of Understanding) has to be entered into by the developer and the state government.

Reservation Policy: There would be reservation for local developers as per the prescribed norms of the MoU’s signed earlier on Mega Projects. [????]

No doubt, as the government puts it, the promulgation of Small Hydro Power Policy-2007 would facilitate employment and business opportunities for local developers but the question that comes to mind is-why at this stage? When so many mega projects have been awarded to PSU's and IPP's and when the 12 percent free power that the state would get from these mega projects would be more than sufficient for the total power requirement of the state; what's the need for going for development of small hydro projects? Is it because of the Environmental Concerns or there are other reasons? The Government spokesperson Tako Dabi says in this regard-

"The policy was needed as the state government was unable to provide power from mega projects to remote villages."

But 'Why'? Why can't power be provided from the Mega Projects to remote villages? Is it because that necessary infrastructure has not been laid to bring power to the villages? Then what about RGGVY (Rajiv Gandhi Gramin Vidyitikaran Yojana) scheme under which each and every villages has to be electrified by the year 2010? Where has the money that state gets as a 90% grant under RGGVY (Rajiv Gandhi Gramin Vidyutikarn Yojana) scheme to lay necessary infrastructure to get the villages electrified, gone?

And if there is no proper transmission and distribution network how could development of small hydro projects help in electrifying the villages? (The Small Hydro Power Policy doesn't mention if one has to lay the distribution network also, apart from transmission line to be connected to state grid. )

Nevertheless, this policy has opened up opportunity for unemployed local engineers to become an entrepreneur and be part of state development; provided the government is true to it's policy of 'single window clearance system'.

Related readings:

Hydroelectricity at Arunachal Pradesh-I
12 pc free power...Is it really free?



    Being 100% dependent of central aid. I feel we need 2 earn revenue (from any source) 2 be a self dependent. Best source is hydro POWER considering all aspect (personally). So long expenditure of transmission and revenue collection is concern its THEIR (pvt contractor) responsible. RGGVY? let this scheme complete (by 2010), perhaps we can collect more revenue even from that agency who use our transmission line. Surely they'll use . . ;-). ok !

  • AG

    I too wouldn't want to let the state dependent on central grant for eternity but I do have a different perspective of looking at the things.

    If expenditure on transmission and revenue collection is the concern of the developers then what about the distribution network? Whose concern is to lay distribution network-State governments or contractors? I assume, there are no distribution network physically (may be present in paper) to cater to the power need of the villages-had there been, I guess, there wouldn't be this excuse of not being able to provide power to villages through the upcoming mega projects. Now if the responsibility of laying distribution networks for villages rests with private developers where does the fund under RGGVY scheme goes? Isn't the state government supposed to electrify each and every village by the year 2010 under this scheme by developing necessary infrastructure to feed electricity to villages? Or is this an excuse to siphon off the fund granted for village electrification under RGGVY by letting the work that was supposed to be done under the RGGVY scheme ny contractor in the pretext of developing small hydro plants?

  • Anonymous

    please elobrate on the policy of "have to build own transmission line connected to state grid". does the facility of state grid exist? If so, do throw some light on it and the policy of state grid towards local developer.

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