The Narendra Modi government?s plan to create a public sector hydropower giant by consolidating existing players has faced a strong opposition from smaller firms like SJVN, THDC and Neepco that are proposed to be merged with NHPC.
According to sources, representatives from these companies raised objections to the proposal at a recent meeting held to discuss the idea and said this would not help achieve the goal of expediting hydel projects. They said the hydropower projects get delayed mostly due to problems arising from socio-political issues that can be resolved only through the attention by the top management. ?If the proposed merger plan is implemented, execution of hydel projects could face delays due to diffusion of attention from NHPC management which will have to handle projects transferred by other hydro PSUs as well,? they added.
Further, if the proposal is implemented, they said, SJVN and THDC could lose support of Himachal Pradesh and Uttar Pradesh governments, respectively, which hold significant stakes (more than 25%) in these companies and whose cooperation is crucial in facilitating project execution. ?That would lead to more delays in execution of hydel projects and increase electricity tariff,? they said.
NHPC will have to buy back shares held by the Himachal Pradesh and Uttar Pradesh governments in SJVN and THDC, respectively, if the merger is to be implemented.
They also voiced their apprehensions that in case the proposed merger plan is implemented, overseas lenders could foreclose loans sanctioned for financing THDC and SJVN projects due to changes in these companies? shareholding pattern.
Meanwhile, unfazed by reservations voiced by SJVN, THDC and Neepco, NHPC has appointed SBI Caps as a consultant to prepare a concept note on the proposed merger plan.
By Noor Mohammad and Sumit Jha
