Assessing applicability and spread public private partnership in hydro power development in India
Student name: Mr Sumit Kumar
Guide: Dr Kaushik Ranjan Bandyopadhyay
Year of completion: 2012
Host Organisation: NHPC Ltd.
Supervisor (Host Organisation): Mr S.N. Jha and Mr A.K. Choudhary
Abstract: Electricity has become the lifeline of social and economic development. Hydropower is a clean and environment
friendly source of electricity generation. India has a vast untapped potential of hydropower which if could
harnessed can solve the problem of energy shortage and meet the requirement of peak demand. Government of
India has taken various initiatives to promote hydropower generation and private sector is allowed to enter in the
electricity generation field. Private participation can be in the form of either as an Independent Power Producer
(IPP) or as a Public Private Partnership (PPP). Development of hydropower is very challenging in all respect.
Cost overrun and high cost of long term finance is common deterrent for private sector having orientation towards
profit maximization. Also electricity being public good, government regulates the tariff making it difficult for
private sector to enjoy attractive Return on Investment. Therefore PPP could be an effective model for attracting
private participation as risks are shared by the government and acceptability and success chances of the project
enhances. With this objective of evaluating suitability of PPP model for hydropower development, the theory
behind PPP was studied and sufficiency of necessary institutional set-ups has been assessed. Comprehensive
descriptive questionnaire was prepared for private developer and NHPC Ltd. but the reply could be managed only
from LANCO Infratech. Also a survey was conducted through objective questionnaire circulated among NHPC,
NTPC, Lanco, Reliance Power, Ministry of Power, IFC and IDFC officials. Getting response was challenging and
poor participation happened. But by analyzing various reports, data available on internet, applying theory behind
PPP and response received by LANCO and survey participants, it could be concluded that PPP model is suitable
for development of hydro power and capable in drawing private investment. Government of India is encouraging
PPP for the development of hydropower.
