Delays caused Rs 14K cr cost overruns in 16 hydro projects:CAG

Delays caused Rs 14K cr cost overruns in 16 hydro projects:CAG

Out of the 16 projects,as many as 11 are being implemented by NHPC.

Delay in implementing 16 hydro power projects by four state-run generators,including NHPC and SJVN,resulted in cost overruns of more than Rs 14,700 crore,CAG said today.

The Comptroller and Auditor General (CAG) said geological surprises as well as many other “controllable factors” led to the delay in implementation of 16 projects by NHPC,SJVN,THDC and NEEPCO.

“Delay in execution of 16 projects by four Central Public Sector Enterprises (CPSEs) resulted in revision of their initial approved cost of Rs 30,005 crore to Rs 44,712 crore. In seven completed/ongoing projects,the cost overrun was in the range of 53 to 148 per cent,” CAG said.

CAG made these observations in report titled ‘Capacity Expansion in Hydro Power Sector by CPSEs for the year ended March 2012′,that was tabled in the Parliament.


Out of the 16 projects,as many as 11 are being implemented by NHPC,while the company is a joint venture partner with Madhya Pradesh government in another project. There are two plants of NEEPCO and one each of THDC and SJVN.

All these 16 hydro plants together have a generation capacity of 6,794 MW. Out of them,THDC’ 400 MW Koteshwar plant,NHPC’s 120 MW Sewa-II and 510 Teesta V are already running. The 520 MW Omkareshwar plant — jointly owned by NHPC

and Madhya Pradesh government — too has started generation.

CAG said that NHPC’s 2,000 MW Subansri Lower,800 MW Parbati-II and NEEPCO’s 600 MW Kameng,among others,are ongoing projects.

Even though,geological surprises were one of the major reasons for the delays,CAG said there were other factors.

“Other controllable factors like delay in handing over of access roads to the contractors,wrong assessment of land requirements,delay in issuance of construction drawings,increase in scope of work due to incorrect assessment of bill

of quantities etc. also contributed to delay in execution of the projects,” the auditor said.

According to CAG,thorough survey and investigation,as envisaged in the Hydro Power Development policy would have minimised geological surprises.

“Other factors like delay in handing over of access roads,delay in issuance of construction drawings,etc,could have been controlled by propoer coordination and monitoring by the CPSEs,” the report said.

All the 16 projects that were to be completed by the four state-run entities by March 2012 have been covered in this performance audit report.

CAG said delays in commissioning of projects led to the state-run entities losing the opportunity of generating 26,282.97 million units of electricity annually.

“Further,additional return on equity to the tune of Rs 1,474.57 crore permissible under CERC Regulations,2009 has also been foregone by the CPSEs,” the report stated.

Pulling up NHPC,SJVN,THDC and NEEPCO,the top auditor said plans for 11,813 MW capacity addition — during 11th Plan period from April,2007 to March,2012 — were prepared without “due diligence”.

The target was later scaled down to 6,794 MW. Even though the revised target was 42 per cent less than envisaged earlier,CAG noted the four companies could achieve only 1,550 MW generation capacity addition.

“Besides,these CPSEs are likely to add only 3,774 MW capacity in 12 projects in 12th Five Year Plan (2012-17) as against 14,535 MW in 33 projects envisaged in the Hydro Power Policy 2008,” the report said.

Meanwhile,the top auditor has suggested the idea of having a high level panel — chaired by Power Secretary – with members from other nodal ministries and state governments as a single window mechanism to monitor as well as expedite

necessary clearances for hydro projects.


Power Ministry should coordinate with concerned state government and other authorities like CEA (Central Electricity Authority),MoEF (Ministry of Environment and Forests),MoWR (Ministry of Water Resources) to ensure timely completion of