Narmada project: BHEL will supply equipment on schedule

Bharat Heavy Electricals Ltd (BHEL) has said it will supply equipment to the controversial 400 Mw Shri Maheshwar Hydel Power Project (SMHCPL or Shri Maheshwar Hydel Power Corporation Ltd) on schedule. However, the public sector company has ruled out being an equity partner in the project.

"We will start supplying 40 Mw hydro turbines to the project from next year as per schedule," BHEL Bhopal Unit Executive Director RK Singh told Business Standard.

BHEL has started supplying some embedded parts and equipment to the project, where according to a source, almost 67 per cent of the civil work has been completed and work on the right side of the bank will soon start.

The project is being constructed on the Narmada river in Mandleshwar town in West Madhya Pradesh. A source said: "BHEL will supply equipment at a discounted price in lieu of equity partnership. The discount is Rs 42 crore and the company will supply at Rs 573 crore against the offer price of Rs 615 crore. The cost includes 10 hydro turbines of 40 MW each."

BHEL will supply Kaplan type hydro turbines on turn-key basis. The equipment supply will start from November this year and turbine supply will start from March next year. After the first two 40-Mw sets, BHEL will supply turbines at a regular interval of one month.

Controversies still haunt the project. A Narmada Bachao Andolan (NBA) activist said, "The project is going the Enron way. Also, rising inflation has made it completely non-viable. BHEL has to consider the public money which will go waste in the project."

At present the project is managed by lenders, mainly Power Finance Corporation. The Rs 2,254-crore project is also being funded by HUDCO and Rural Electrification Corporation.

The project has been facing controversies since inception on rehabilitation issues, environment, economic viability and financial irregularities although the project, according to sources, will generate power at Rs 3.30 per unit when it will be completed by 2009. At present the state government is purchasing peak power at Rs 9 per unit.

The run-of-the-river project would affect 22 villages. Of them, 13 would be fully submerged and nine would be partially submerged. It is estimated that as many as 9,459 families would be affected by the project.