The decision of the government to privatize the Likhimro Hydel Power Station and to be handed over to the NEC Energy Private Ltd. it is a total sell out by the government of Nagaland. The Likhimro Hydro Electric Project (LHEP) construction started somewhere in 1991. Completion of the project was scheduled for 1998 at one time, but due to numerous hurdles it delayed and finally commissioned in Feb.2002, at the cost of rupees 250 crores approximately, though the initial projected estimate for LHEP was 46.48 crores only.
After completion of the project due to shortage of manpower and technical expertise, the power station could not function as expected. Because of which, the Government of Nagaland had call for “Operation and maintenance”(O&M) bid nationwide on 1st October 2005. The bidders were advice to go to the LHEP for physical site inspection with engineers brought from different part of the country to investigate, inspect and analyze and offer bids for O&M.
Accordingly, there were five bidders both from the State entrepreneurs and outside the State with requisite capability to make the LHEP operational and generate power for the State. All the bidders had put all efforts and had sincerely made the bid as per the Government instruction. However, the news item with the caption “Government Privatizes Likhimro Power Project” was a surprise when the State’s welfare is not considered. Some bidders as per the call for O&M had bided accordingly, some had bided to take over the LHEP through lease from the Department of Power (DoP). Lease bidders should have been disqualified from the bid instantly because they have not bided for O&M, instead now they are favored. Is this the System that works? And who should be held responsible?
The question here therefore is the difference between; Operation & Maintenance (O&M) and LEASE. O&M would meant that a firm operates and maintain the LHEP for the Government at the fixed quoted rate and LEASE would meant that by contract LHEP ownership is conveyed to NEC Energy Pvt.Ltd. for a period of 10 years or more by the Government. The modus operandi is that NEC Energy Pvt. Ltd. generates power from the State owned LHEP and sells to the Government of Nagaland at the rate of Rs.1.75/- (as per bid), now negotiated at the rate of Rs.1.20/- paise per unit power.
To my understanding, when bid is specified and called for a particular job, expectations from the Government is to award the job to the firm quoting lowest which would be most beneficial to the people of Nagaland, if considered to be practical and workable. Whereas, apparently an arbitrary decision had been taken in favor of the highest bidder, regardless of the conventional contract law. If flouting the contract rules was preconceived or pre-determined, why in the first place called for a bid to victimize the other participants.
One instance, the National Hydro Power Corporation (NHPC) had constructed Loktak Hydro Electric Project on the Built Operate Own (BOO) basis where the Manipur State Government had not invested at all. Now they generate and sell generated power at the rate of Rs.0.90 paise per unit to various States.
In our case NEC Energy Pvt. Ltd. even without spending a penny on the construction of our project would be given almost equivalent ownership status of LHEP for 10 years or more as NHPC of Loktak HEP. Now, we will be at the mercy of NEC Energy Pvt.Ltd, because whether they generate power or not is their responsibility and I have my doubt as they surely will put different local environment excuses exploiting our ignorance.
To my knowledge the bidders had quoted on two different basis; on Semi-Contract and on Lease. To generalized the analysis on the basis of generating 100 million Units annually by each bidder, the lowest bidder (Swamina International Pvt. Ltd. - SIPL) had quoted to generated power at the rate of Rs.0.17 paise per unit for Nagaland State on semi-contract (i.e. O&M) basis and highest bidder NEC Energy Pvt.Ltd. to generate and sell at the rate of Rs.1.75/- paise per unit on Lease basis. In between there are Nagaland Builders Pvt.Ltd. at Rs.0.24/- paise per unit and Sovika Technical and Services Pvt.Ltd. at Rs.0.54/- paise per unit on semi-contract basis and KC.Associates at 1.45/- per unit on lease basis.
For an ideal Hydro Electric Project, the Break-Even-Point of investment is in about 8 (eight) years. As per the analysis above the Break-Even-Point of SIPL is expected at 10 ½ years. In the present arrangement with NEC Energy Pvt.Ltd. forgetting about the Break-Even-Point, logistically the State will have to continue investing for the benefit of the said firm. Is this LHEP project going to be another Nagaland House Kolkata ?.
Is there transparency in the decision by the Government of Nagaland to give away on Lease the Rs.250 crores LHEP (the White Elephant) to the highest bidder? Isn’t it high time to encourage indigenous entrepreneurs and local unemployed Engineers to be self employed/engaged? How, long are we going to depend on the outsider’s support? Is 25,000 assured employments on the right track?
To my understanding the LHEP was hijack by outside elements for which we could not complete the project in time for which the project cost had escalated beyond imagination, even the Zunki Bridge the life line to LHEP could not be completed till today and the outside firm the Quadricon Pvt. Ltd had drag the DoP to court instead of completing the bridge. Isn’t it high time for every right thinking Nagas to rise to the occasion or do we have to continue allowing non-locals to take advantage again and again?
Micheal Rekhro Naga
Kohima
