Damning audit

The CAG indicts Uttarakhand for pursuing hydel power projects indiscriminately without concern for the environment.

in New Delhi

IN a severe indictment of the Uttarakhand government, the Comptroller and Auditor General (CAG) of India said it was pushing the State towards a major environmental catastrophe by following a highly ambitious hydropower policy. In a report titled Performance Audit of Hydropower Development Through Private Sector Participation, which was released recently, the CAG substantiates the allegations made by non-governmental organisations and project-affected people that the government had overlooked environmental concerns. The report has come at a time when the government is under the scanner for the damage caused by the Tehri hydroelectric project and the Loharinag Pala hydel power project in Uttarkashi district, which has been stalled since August.

The CAG has appraised 48 projects allotted to independent power producers between 1993 and 2006 with a projected generation capacity of 2,423.10 megawatt. The findings are damning both for independent power producers and the State government. Some of the highlights of the findings are:

Until March 2009, only a meagre 10 per cent of the projects, with a generation capacity of 418.05 MW, were complete and operational. The prime reasons for the delays are problems associated with land acquisition, forest clearances and enhancement in project capacities.

Significant areas of concern are inadequate pre-feasibility studies of the project, deficient project execution and absence of monitoring and evaluation of the projects by the nodal agency/departments (Uttarakhand Jal Vidyut Nigam Limited (UJVNL) in this case.)

Even more grave is the total neglect of environmental concerns, the cumulative impact of which may prove devastating to the natural resources of the State.

Uttarakhand, which was carved out of Uttar Pradesh in November 2000, had embarked on an ambitious power generation policy in order to convert the power-starved State into Urja (meaning energy in Sanskrit) Pradesh. Through a policy spelt out in October 2002, the government chalked out a plan to harness its hydel power potential.

A net importer of power, Uttarakhand is able to meet only 52 per cent of the consumption demand from its own resources. It has a hydel power potential of the order of 20,000 MW of which only 3,124 MW has been harnessed so far. Forty-eight projects have been allotted to private power producers since 2002. Of these, 34 were allotted when the State was still a part of the undivided Uttar Pradesh. After the creation of the new State, the 34 power developers had to enter into a fresh agreement with the Government of Uttarakhand.

The CAG has audited these 48 projects. The audit included key aspects of planning, allotment, operation, environmental impact and monitoring of the projects. It found fault with the authorities at each step of the project execution and monitoring.

For example, the audit found the pre-feasibility studies carried out by UJVNL inadequate, raising serious doubts about their credibility. These studies were used by the power developers in their favour.

Another grey area pointed out by the report is capacity enhancement after allotment. In 85 per cent of the projects, alterations in capacity ranging from 22 per cent to 329 per cent were noticed. The audit found that in nine out of the 13 sampled projects, capacity was enhanced after the allotment without any technical study. It was this capacity enhancement that created serious environmental concerns.

Projects with a capacity of 25 MW and below need not seek environmental clearance and are also not expected to pay a royalty. In order to garner maximum benefits and also to avoid penalty for delays in execution and operation, project developers sought and obtained approvals for capacity enhancement. In nine projects, the capacity was pegged below 25 MW. Undue extensions, without charging for liquidated damages owing to delays, were noticed in almost 85 per cent of the cases.

The audit also found fault with the allotment of projects. It was found that several developers had their core competencies in areas other than power production, such as steel production, tourism, sugar manufacture and general construction, and had no prior experience in the power sector. Selection of such developers, the report notes, was primarily responsible for the inordinate delays in the execution of the projects. It was also found that in several cases, the project developers had transferred the projects to other entities without seeking a clearance. This not only caused delays but also resulted in financial loss to the State as the developers circumvented the payment of penalties and royalties.

Lack of punitive action

Another serious irregularity that has resulted in severe loss to the State is the failure on the part of the authorities to take punitive action against the developers for delays in project execution. Out of the 48 projects studied, the audit found that only 10 per cent of them were complete and operational after a period of 15 years; only two projects were commissioned as of March 2009; and nine were under various phases of construction. The remaining were found to have made no progress beyond the stage of submitting detailed project reports and receiving clearances from different sources despite the finalisation of the implementation agreement. However, there was not a single instance of punitive action being taken against any erring developer. No liquidated damages, as a consequence of undue delays in the commissioning of the projects, were recovered in a single case.

It is in the area of environmental degradation that the audit has been more severe. The report points out that the State's hydel power policy is silent on the vital issue of maintaining downstream flow in the diversion reach of the river. Diversion reach is the stretch between the point of diversion of a river into a tunnel and the point where it emerges and flows back into the natural stream.

In four out of five operational projects, riverbeds downstream had almost completely dried up, the water flow had been reduced to a trickle and was extremely inadequate for the sustenance of the ecology and the groundwater aquifers. The report states categorically that given the current policy of the State government of pursuing hydropower projects indiscriminately, the potential cumulative effect of multiple run-of-river power projects can turn out to be environmentally damaging. Presently, 42 hydropower projects are in operation, 203 are under construction or clearance stage, while several others are at the conceptual stage.

The audit examined the case of the Alaknanda river valley to gain an insight into the problems arising out of tunnelling of rivers. The report points out that in the Alaknanda valley, 60 hydel projects, entailing a diversion reach of 249.60 kilometres, were either built or were in the pipeline. Had measures to maintain adequate downstream flow not been taken, it would have devastated the ecology of the river valley, it says.

The report unambiguously states that the neglect of environmental concerns was obvious as the muck generated from excavation and construction was being dumped into the rivers, resulting in increased turbidity of the water, deterioration of water quality, and an adverse impact on aquatic biota. It also notes that plantation activity was highly deficient; almost 38 per cent of the projects reported hardly any plantation, posing severe hazards both for the natural ecology and the stabilisation of hill slopes.

The report says that only projects with a capacity above 25 MW were referred to the Government of India for environmental clearance. For those below 25 MW, the State agency, the Uttarakhand Environment Protection and Pollution Control Board (UEPPCB), issued no-objection certificates (NOCs). Out of eight sampled projects, namely Hanuman Ganga, Srinagar, Rajwakti, Debal, Birahiganga, Bhilangana III, Agunda Thati and Loharkhet, which were under construction/operation, only five had obtained the board's consent to establish the project. Of these, the consent to operate was obtained only by one, Debal, whereas the other four were also operational. Thus, 75 per cent of the projects were operating without the consent of the board.

It was also noticed that the board had failed to enforce key conditions regarding submission of monthly reports, proper disposal of muck and ensuring a minimum flow. No penal action was taken for flouting environmental provisions, and no regular inspection was carried out except for the mandatory one at the time of issuing the NOC.

The audit pointed out that natural water resources used for drinking and irrigation purposes had depleted considerably because of the diversion of river water into tunnels. It says the problem remained unaddressed although the local people had brought the issue to the notice of the project developers and the government.

Harmful effects

The environmental degradation pointed out by the CAG is borne out by real-life experiences in the region. A case in point is Uttarkashi district. Trout occurring in the river Asiganga is a major attraction for tourists and anglers in the district. But this fish species is now endangered owing to indiscriminate dumping of muck in the river from three hydroelectric projects, each of 9 MW capacity. The Uttarkashi Hotel Association has brought the issue to the notice of the district administration, but so far no action has been taken. The association has organised a trout festival to draw the attention of the authorities to the problem and to highlight the need for the conservation of trout. According to Rajendra Pawar, president of the association, trout survives only in clean water.

Landslides and flooding are the other real threats caused by environmental degradation. At Bhatwadi village, barely one kilometre from Pala, a 2.7-km tunnel was constructed after blasting the hills for the now-abandoned Loharinag Pala hydel project on the Bhagirathi river. A massive landslide occurred in the village in August ( Frontline, October 8, 2010). The Tehri dam, which has submerged thousands of acres of land and hundreds of villages and displaced thousands of people, is threatening to flood 45 more villages as the dam authorities raised the water level in the reservoir to 830 metres from the original 820 m. Vast areas have been flooded and hundreds of families are facing eviction as their villages are on the verge of being submerged. No rehabilitation measures have been taken up so far.

Further, the impact of unbridled ecological exploitation by power project developers was felt recently by the people during heavy rains in the Uttarakhand hills. The hill slopes, which have already become unstable owing to blasting and tunnelling, have become more vulnerable. The water level in the Tehri reservoir rose to such dangerous levels that the 304-MW Maneri Bhali Phase II power project, which is situated downstream on the Bhagirathi, had to be shut down for three days from September 20, causing losses worth over Rs.5 crore to the State government. It has now asked the Centre for compensation. Landslides and flash floods, apparently triggered by incessant construction activity in the Alaknanda and Bhagirathi river valleys, are threatening to displace thousands of people as huge cracks appeared in the earth.

There is not much evidence of the government taking any corrective steps to mitigate the environmental disaster that is waiting to strike Uttarakhand. Efforts to get the government's response to the CAG report were not fruitful. But the Centre appears to have taken note of the report. It has asked the Indian Institute of Technology Roorkee to study the environmental impact of hydel projects in the State.

Projects scrapped

Meanwhile, the National Ganga River Basin Authority (NGRBA), which met on November 1 in New Delhi under the chairmanship of Prime Minister Manmohan Singh, has finally scrapped the three major hydel projects on the Bhagirathi namely, Loharinag Pala, Pala Maneri and Bhairon Ghati.

Loharinag Pala, which was being executed by the NTPC, had been stalled since August after a Group of Ministers, headed by Finance Minister Pranab Mukherji and comprising Power Minister Sushil Kumar Shinde and Environment Minister Jairam Ramesh, ruled against its execution.

Pala Maneri and Bhairon Ghati, which were to be executed by the State government, were only in the conceptual stage.

The NGRBA has declared the 130-km stretch, from the Gangotri glacier downstream, as an eco-sensitive zone. The decision comes at a time when the Ganga is under severe stress from unmitigated exploitation by the hydel project developers.