MP Govt Cancels Maheshwar Hydel Project, NBA Activist Demands Termination of 6 More

Bhopal: Two days after the Madhya Pradesh Government terminated the power purchase agreement (PPA) of the 400 MW Maheshwar Hydel Power Project on Narmada river for the violation of PPA terms and against public interest, a Narmada Bachao Andolan activist has demanded scrapping of six more ongoing private power projects on Narmada river to save Rs 50,000 crore.

“If the state government can take decision like the one taken for Maheshwar power project, it can save Rs 50,000 crore in near future,” said NBA activist Alok Agarwal, in a letter to Chief Minister Shivraj Singh Chouhan, on Sunday, April 26.

The state government pays Rs 2,034.30 crore every year as fixed charges to six private companies -- JP Bina Power, Sagar; JP Nigri, Singrauli; Jhabua Power, Seoni; MP Power, Annupur; BLA Power and PTS Lenco -- without purchasing a single unit of electricity. This is according to the agreement, which further states that after 25 years, the state government will pay a whopping Rs 50,000 crore even without purchasing a single unit of power from the private power companies, the letter said.

Agarwal further wrote, “In wider public interest and to save massive money, the government should scrap the six more ongoing power projects on Narmada.” 

Almost 25 years after signing the agreement and spending over Rs 3,000 crore of public money, the Shivraj Singh Chouhan-led BJP government terminated the PPA of the 400 MW Maheshwar Hydel Power Project on river Narmada owned by Shree Maheshwar Hydel Power Corporation Limited (SMHPCL), promoted by S Kumar. 

Citing “breach of clauses 16.4(A), 16.4(B)and 16.4 (C) of the PPA dated November 11, 1996, and breach of clauses of A&RA (amendatory and restated agreement)”, a five-page order issued by Madhya Pradesh Power Management Company Limited on April 18 terminated the PPA “with immediate effect”. 

The state government underlined the ‘violation of PPA terms and against the public interest’ as main reasons behind termination of the project. However, it is to be noted that social activists have been raising the issue for almost two decades before the government finally terminated the deal. 

Along with this, the state government also terminated the escrow agreement and the rehabilitation agreements. The order also said that “public interest” has been jeopardised by various acts of “default commissions, omissions” by the promoters.

Also read: Singrauli’s Fly Ash Flood was an Industrial Disaster Waiting to Happen

Since its inception, the project has been mired in controversies due to alleged financial irregularities and delay. In 2014, the Comptroller and Auditor General (CAG) had also criticised the government for not terminating the project despite undue delay in its completion.

The 400 MW project on the Narmada in Khargone was also said to cause submergence of 61 villages and was one of the 30 large dams proposed to be built in Narmada valley.

According to the agreement, “the PPA required the state government to pay project promoters huge amounts of public money every year for 35 years from the date of the commissioning of the project, whether or not the electricity was purchased by the government,” said NBA activist Rahmat.

Further lashing out at the government, activist Agarwal demanded the massive concrete structure that was built at the dam site and has been rendered useless now, be converted into a monument as a sign of ‘waste of public money’ by the government.

He said, “We stand vindicated. Such agreements were signed to benefit the power company not for the public. A monument should be created at the concrete structure near dam site symbolising the monumental waste of public money.”

Agarwal also alleged that such agreements inked by the state government were illegal. “Just like canceling this, the state government can save Rs 50,000 crore by withdrawing the six more projects on Narmada because the similar irregularities (violation of PPA and financial ) have came to fore,” he said.