Uhl project heads for huge cost overrun
Rakesh Lohumi
Tribune News Service

Shimla, September 13
With the revised cost shooting past Rs 900 crore, the 100-MW Uhl project, the only major scheme being executed by the state electricity board, is heading for huge time and cost overruns, much like the controversial Larji project.

The central electricity authority had approved a cost of Rs 432 crore in 2002 and it was originally scheduled to be commissioned by March, 2006.

The cost has already more than doubled and even according to the revised completion schedule of March, 2009, it has fallen behind by more than two years.

Obviously, the board has not learnt any lesson from the mistakes committed in the 126 MW Larji projects, the costliest hydroelectric project to date, which stood out only for a large-scale financial bungling, corruption and tardy implementation.

As the government and the management of the board had totally failed to check corruption in the execution of the project, the state electricity regulatory commission was forced to order an independent inquiry to investigate the high cost of Larji project.

Its findings led to registration of vigilance cases against several officials of the board. The situation has worsened as the government has not only been dithering on the issue of unbundling, but has also not taken the required corrective steps to clear the mess in the board. The result is that disastrous performance has been repeated.

Despite all controversies surrounding the Larji project, the board chose to award works of Uhl projects to some of those contractors who had faltered in execution.

The present government had reviewed the progress soon after assuming office and rescinded the contract for some major works like construction of head race tunnel, but that has not helped much.

On completion, the project will only generate 391 million units of power annually and as the cost is likely to go up further, the generation cost will be around Rs 5.50 per unit as against the average sale rate of Rs 3.62 per unit.

As against the average cost of Rs 5.5 crore per megawatt for major hydroelectric projects, the cost of the projects executed by the board has been as high as Rs 10 crore per megawatt.

Even the Asian Development Bank, which is funding four projects of the state power corporation to be executed over the next eight years, has pegged the cost at Rs 6 crore per megawatt.

The government had decided not to give any project of more than 25 MW to the state board power corporation.

However, for reasons best known to the government, the under-construction Uhl project was not handed over to it as was done in case of the Pabbar valley project.