Recession casts shadow on U'khand hydel sector

The recession seems to have cast its shadow over the hydel sector with a consortium backtracking after winning the contract for building four hydel projects in the Nayar Valley of Uttarakhand.

WWI-RRE, the consortium of RR Energy and Worlds Window Impex (WWI), had agreed to pay Rs 41.5 crore, including an upfront premium of Rs 29.5 crore, considered to be the highest in the country, for building four hydel projects with a total capacity of 23.25 Mw.

But after depositing the initial amount of Rs 50 lakh with the state government, the consortium withdrew apparently due to the global recession and also due to high cost of the project, according to sources.

Uttarakhand Infrastructure Projects Company Ltd (UIPC), a joint venture between IL&FS and the state government, had finalised the bidding process.

Of the Rs 41.5 crore, UIPC was charging Rs 29.5 crore as upfront premium from the developer, Rs 10 crore as fixed development premium and Rs 2.1 crore as project development expenses.

The consortium had bid for 17 Mw Nayar dam, 2 Mw Santudhar-I, 2 Mw Santudhar-II and 2.25 Mw Biyali Gaon – all on Nayar river, a tributary of Ganga in Pauri district.

Nine companies were selected in the final bidding process. These include ACC, Bhilwara group and Nagarjuna Cement.

An investment of Rs 200 crore was proposed in the four projects.

Meanwhile, after the exit of WWI-RRE, UIPC has again initiated the bidding process, the sources said.