Govt to compensate NTPC for cancellation of Uttarakhand project

In what could be the first for the country, the government today said NTPC would be duly compensated for the cancellation of its 600-mega watt (Mw) hydropower project at Loharinag Pala in Uttarakhand. The compensation could run into Rs 1,000 crore.

Power Minister Sushil Kumar Shinde today said a Cabinet note would be moved for compensating NTPC. “We have got an assurance from the government that NTPC will be duly compensated,” said Shinde. If the government does not compensate NTPC, the expenditure incurred so far will be shown as loss on NTPC books.

NTPC has so far invested about Rs 600 crore on the project and placed order worth Rs 2,000 crore for equipment. A group of ministers (GoM), headed by Finance Minister Pranab Mukherjee, on Friday scrapped NTPC’s Loharinag Pala hydel project on environmental and religious grounds. “Ganga is our national river and it was a hard decision, but it was taken considering the religious feelings of the country,” said Shinde.

“A technical panel would be set up to recommend specific safeguard measures to be undertaken to protect the environment and to maintain the fragile eco-geological balance in the area,” Shinde had said earlier.

The GoM also scrapped two Uttarakhand government projects on the Bhagirathi — 480-Mw Pala Maneri and 381-Mw Bhairon Ghati hydel projects. A government official said not much expenditure had been incurred on these two projects. “Only surveys had been conducted for the two,” said the official, who did not wish to be identified.

Work on the Loharinag-Pala dam had commenced in 2005, but it was suspended last year by the Environment Ministry, following concerns, raised by environmentalists and locals, that the free flowing character of the Bhagirathi has almost come to a halt. Shinde had earlier stressed on the need to have better “cumulative environmental assessment”.

It is not clear how the government will compensate NTPC, a navratna company, but the country’s biggest power producer is upset that its investment will go waste, if the project does not see light of the day.