Tamanthi hydroelectric project no longer commercially unviable

Geological, technical problems and the exhaustive wish list from Myanmar groups have inflated the cost of the Tamanthi hydroelectric project to about Rs 17,000 crore

The desirability of infusing this much capital would require a comparison with the strategic cost of the project. Unless helped by an attractive financial package by the Government of India, the project is understood to be commercially unviable.

Financial support here implies a huge grant of Rs 3,418 crore and a subordinate loan of Rs 5,612 crore to be provided by the India at a minimal rate of interest of 1% per annum, besides allowing NHPC to infuse Rs 2,000 crore from its own resources and raise a sizeable commercial loan of Rs 3,701 crore at market rate of interest, which would bring the sale rate of energy to the existing levels in the Indian market. These figures are at July 2010 price level.

Further,while the DHPP had nominated IGE as the local partner in Maynmar of NHPC for the projects, the two companies are yet to come to an agreement, with IGE seeking to be appointed as consultant for implementation of the projects.