Sikkim government scraps Teesta-I hydel project awarded to NCCL

source: Economic Times

.HYDERABAD: In a setback to NCC Limited, formerly Nagarjuna Construction Company Limited, the Sikkim government is believed to have cancelled the proposed Teesta-I hydel power project that was bagged by the company. 

According to a senior official of the Sikkim government, the state home department has issued a notification cancelling the 280 MW power project.

"The project was cancelled for two reasons. Firstly, continuous opposition from locals on the project and secondly, environmental issues. However, it was cancelled due to public resistance," the official told PTI.

Along with Teesta-I, the state government has also cancelled three other Hydel Power Projects- the 99-MW project at Bop, the 99-MW project at Bhimkang, 99-MW project at Lachung, the official added.

The four projects were planned at Lachen and Lachung in North Sikkim on three tributaries of the Teesta and Lachen rivers.

When contacted, KV Rao, CEO, Power Division, NCCL said they have not received any official intimation from the Sikkim government.

"We have been asking the government to allow us to conduct studies about the project. We were not allowed and we hear this news (cancellation of project). We will appeal to the government to allow us to conduct studies first and based on that they can take decision," Rao said.

The government of Sikkim had signed Memorandums of Understanding (MoUs) in 2005 for Teesta Stage-I.

Meanwhile, NCC has submitted Expression of Interest to develop part of 1000 megawatt Hydel power projects in Bhutan, according to sources.

Bhutan, which has large untapped hydro-electric potential, has been seeking technical and financial support from the Indian government and companies to exploit these resources.

Under the current policy, such developmental support is routed through state-owned companies such as NHPC.

"It would cost anywhere between Rs 6000 crore to Rs 10,000 crore to develop a 1,000 megawatt Hydel power project in Bhutan. As many as 35 companies are in the fray," sources said.

NCCL did not comment on the Bhutan projects. In case of Sorang, the company has to give 12 percent of the power produced, to Himachal Pradesh Government, sources added.

PE investors breathe easy as Sikkim settles Teesta dispute 

Reghu Balakrishnan / Mumbai Jul 06, 2012, 00:16 IST
source:Business Standard


The $425-million private equity investment in Asian Genco was in the headlines three years ago, as it was the largest deal in an Indian power company. Then, the company came again in the headlines for a less fortunate reason — its dispute with the Sikkim government over the 1,200-Mw Teesta-III hydropower project.

Now, after months of battle, the government of Sikkim has decided to reach a settlement with Teesta Urja Ltd, developer of the project, by paying Rs 296 crore for a 26 per cent stake in the company. Early this year, Teesta Urja Ltd, which sold 50.9 per cent stake in the company to Asian Genco, and the government of Sikkim had locked horns as Teesta Urja did not dilute a 26 per cent stake in the company to the government, a pre-condition in the memorandum of understanding signed between the two.


The government approached the State Electricity Regulatory Commission against Teesta Urja and got an order for appointing a sole arbitrator. Teesta Urja had obtained a stay on the order by approaching the Central Electricity Regulatory Commission.

A K Giri, secretary of the state’s power and energy department, said, "We are reaching the settlement as we have already paid about Rs 162 crore out of a total payment of Rs 296 crore. We have received a small stake and will receive about 26 per cent stake once the payment is completed." According to him, the project is expected to be commissioned by September 2013. Athena Projects holds about 29 per cent stake in Teesta Urja Ltd.

In March 2010, a group of investors, led by Morgan Stanley Infrastructure Partners, had bought about 44 per cent stake in Singapore-based Asian Genco for $425 million. The other investors include Everstone Capital, General Atlantic, Goldman Sachs Investment Management and Norwest Venture Partners.

Mails sent to Morgan Stanley Infrastructure Partners and General Atlantic did not elicit any response.

At the time of investment, the company had projected Teesta-III as its largest project. The company, in which former Union power secretary R V Shahi is a consultant, had earlier raised funds from power trading firm PTC and Tiger Global Management. Apart from Teesta-III, it owns a coal-based thermal project in Andhra Pradesh, with a 1,320 Mw capacity.


NCC fell as much as 4.44% intraday on Friday after the Sikkim government official said they have scrapped 280 MW Teesta-1 hydel project due to local issues. The project was received by company's subsidiary.

At 15:08 hours IST, the share was trading at Rs 43.30, down 3.78% with volumes of 4,16,847 equity shares.

Market capitalisation of the company currently stands at Rs 1,111.01 crore.