Shillong, Sept 12: Meghalaya government on Tuesday scrapped two power projects – the 450 MW Kynshi stage-I and Upper Khri Stage I & II after they were found to be financially unviable.
Cabinet approved the termination of two Hydro Power Projects signed by GoM years ago namely the Kynshi-I Hydro Electric Power Project and the Upper Khri Stage-I and Stage-II Projects.
The two projects were in collaboration with private parties but due to financial non-viability… pic.twitter.com/RfhaXIV0Dd
— Conrad K Sangma (@SangmaConrad) September 12, 2023
Addressing media persons after a cabinet meeting, Chief Minister Conrad K Sangma said the two hydro power projects were signed by the government of Meghalaya with private power developers many years back.
The Memorandum of Agreement (MoA) for Kynshi was signed with M/s Athena Projects Pvt Ltd on BOOT basis on 11-12-2007, while the Upper Khri stage I & II were signed in 2012-13 with M/s SM Energenco Ltd.
“Because of the financial non-viability of these projects and the rates coming up too high and also the time taken by the different companies to implement them, the decision was taken by the Cabinet that both these projects – Kynshi stage– I and Upper Khri stage– I & II projects will be terminated,” CM Sangma said.
He also informed that the government will immediately move for looking for new partners or maybe the same partners but in a new format because the projects in their current form are not viable in terms of the rates.
Referring to the new technologies being employed in power generation where pump storage and other facilities can be used and also the combination of water being released from one project and being used in the downstream for another project like in the case of Upper Khri stage I & II, he said the projects also need to be changed.
“Hence, the government and the department will immediately work in that aspect and we hope that very soon we will be able to have the expression of interest to move forward with these projects in its new form,” he said.
Hurdles for Kynshi stage-I
One of the biggest reasons for the termination of contract for Kynshi stage-I was the delay on the part of the contractor to execute the work on time.
In addition, the Ministry of Environment, Forest & Climate Change has revised its term of reference for e-flow in 2017 which had effectively reduced the water availability for power generation. As per the new Term of Reference, the generation capacity shall be reduced to 845 MU from early proposal of 1087 MU and installed capacity to 210 MW from 270 MW.
On the new Term of Reference (TOR) the cost of tariff is 8.58/unit from earlier 7.02/unit at 2015 price level as the generation capacity is reduced to almost 20% whereas cost project cost is reduced only 4% and due to high cost, thus the project cannot proceed further.
The Director of Independent Power Producers (IPP) has further requested that they may be allowed to add the Pump Storage Hydro Scheme to the existing project to make this project viable, which will shoot up the prices further.
