The Centre today approved revised cost of Rs 4,020.63 crore for 720 MW Mangadechhu Hydroelectric Project (HEP) in Bhutan which is under implementation.
"The Union Cabinet chaired by Prime Minister Narendra Modi has given its approval to Revised Cost Estimate (RCE) of Rs 4020.63 crore for the ongoing 720 MW Mangadechhu Hydroelectric Project (HEP) in Bhutan," said an official press release.
The project will provide surplus power to India, it said, adding that the expeditious RCE approval will enable project works to proceed smoothly without interruption, it said.
The bilateral agreement to execute the Mangadechhu HEP was signed between India and Bhutan in April, 2010 at the approved cost of Rs 2,896.3 crore (March 2008 price level) with funding by Government of India as 30 per cent grant and 70 per cent loan at 10 per cent annual interest to be paid back in thirty equated semi-annual instalments.
The total cost escalation for the project, at this stage, is Rs 1,124.359 crore.
The factors behind cost escalation to the RCE are due to inflation from March 2008 to March 2014, construction of cut-off wall against permeation grouting upstream coffer dam, exchange rate variations and other causes, etc, it added.
