HEP cost increases
Design of HEP II
The government has approved the Revised Cost Estimate of Punatsangchhu-II Hydroelectric Project (HEP) in Bhutan, adding increase in inflation and changes in project design.
It has put the new cost at Rs. 7290.62 crore for the ongoing 1,020 MW HEP, up, at this stage, by Rs.3512.82 crore.
Cost rose due to increase in inflation from March 2009 to March 2015, change in surface power house to underground power house, increase in capacity from 990 MW to 1,020 MW, additional requirements due to Bhutan’s National Transmission Grid Master Plan and adverse geological condition encountered during the project.
The Project will provide surplus power to India and thus augment power availability in the country and would enable project works to proceed smoothly without interruption.
The bilateral agreement to execute the Punatsangchhu-II HEP was signed between India and Bhutan in April, 2010 at the approved cost of Rs. 3777.8 crore (March 2009 price level). The Indian government is providing funding through 30% grant and 70% loan at 10% annual interest to be paid back in thirty equated semi-annual instalments. fii-news.com
