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COME ONE, COME ALL: LET'S EXPLOIT NORTHEAST
The state’s share of the cost will be adjusted against future revenues from the projects
By Utpal Bhaskar
A file photo of the 200 MW lower Subansiri hydel project. Photo: Indranil Bhoumik
New Delhi: In an attempt to accelerate hydropower projects in Arunachal Pradesh and pre-empt China from diverting river waters that flow into the Brahmaputra, the Indian government has found a way to get the state on board—a prerequisite if its strategy of containing its eastern neighbour is to succeed.Arunachal Pradesh has the highest hydropower potential in the country, but not the money to stump up as its share of project costs. To get around the problem, the state’s share of the cost would be adjusted against future revenues from the projects. Apart from the up to 26% equity that a state holds in hydropower projects, it gets 12% of the electricity generated from them for free.
“Since the Arunachal Pradesh government doesn’t have the money, their equity contribution can be adjusted against future revenues,” said a senior central government official, requesting anonymity. The state government requires to contribute around Rs.16,000 crore as equity to 41 projects totalling 35,000 MW over a period of 10 years.
The state is largely dependent on the Union government financing. “We had requested the government of India. A final decision is yet to be taken,” said Hari Krishna Paliwal, chief advisor to the Arunachal Pradesh government. A second central government official, who also didn’t wished to be identified, confirmed the plan.
“Financial support was sought for Arunachal Pradesh government equity in hydropower projects,” this person said. “This is the right step forward. For hydropower projects to succeed in Arunachal, the state government should be on board.”
This follows New Delhi’s earlier attempts to get the Assam government and civil society groups on board to speed up the pace of building the 2,000 megawatt (MW) Lower Subansiri project in Arunachal Pradesh.
The Centre’s strategy comes against the backdrop of China’s ambitious $62 billion south-north water diversion scheme of the rivers that feed downstream into the Brahmaputra, known in China as the Yarlung Tsangpo.
Of the 2,880km of the Brahmaputra’s length, 1,625km is in Tibet, 918km in India, and 337km in Bangladesh. Arunachal Pradesh’s potential for hydropower generation is estimated at 50,064MW, but less than 1%, or 405MW, has been commissioned so far, even though 94 projects with a combined capacity of 41,502.5MW have been allotted by the state government.
The state has an electricity requirement of 100 MW. “The equity contribution will go towards attracting an investment of around Rs.280,000 crore in the state. The 35,000 MW can meet not only the entire electricity demand of the north-east India but can also meet the peak power requirement of the northern region.
Given the strategic importance of the state, this equity contribution which we have asked for as grant will also help the state in self sustaining itself,” Paliwa said. Of the eight river basins in Arunachal Pradesh, Subansiri, Lohit and Siang are of strategic importance, as they are closer to the border with China.
Any delay in executing these projects, particularly on rivers originating in China, will affect India’s strategy of establishing a prior-use claim. Under international law, a country’s right over natural resources it shares with other nations becomes stronger if it is already putting these resources to use.
China has 36 projects on rivers upstream of the Brahmaputra, of which 30 have been completed. Experts such as Alka Acharya, director of the New Delhi-based Institute of Chinese Studies and editor of China Report, have maintained that India’s success will depend upon the extent to which partners are brought in from the north-east.
“The Central government and state agencies are working at cross purposes to the extent that it has become a comedy of errors. Is there any rethinking on strategic approach on North East? In the new strategic imperatives it is the Achilles heel. This is a test case for the new government,” said Acharya.
The Bharatiya Janata Party (BJP), which has been voted to power, has pledged special attention for the North-East in its election manifesto. “Resource-rich North-Eastern states are lagging behind in development due to poor governance, systemic corruption and poor delivery of public services,” it said.
“There will be special emphasis on massive infrastructure development, especially along the Line of Actual Control in Arunachal Pradesh and Sikkim,” the manifesto promised.
According to India’s new hydro policy, apart from providing 100 units of free electricity per month to each project-affected family for 10 years from the date of commissioning, 1% free power is to be provided to the local area development fund from revenue generated by the project.
“For states that don’t have financial resources to provide upfront equity, it may not be a bad idea to adjust their equity contribution against their entitlement of free power in future years from the project,” former power secretary Anil Razdan said.
“However, I would strongly urge raising the share of the local area populace which is affected by the project or is in its vicinity. This would incentivise the local population to help in the early commissioning of the project so that their share of free power starts flowing.”
New Delhi is also focusing on the development of water storage projects awarded in Arunachal Pradesh to manage the fallout from China’s plans.
It plans to allot at least one major project each in Subansiri, Lohit and Siang basins as close to the international border as possible. It is also developing the physical infrastructure along the Brahmaputra river basins, having identified roads, bridges and air connectivity that need to be built.