Meghalaya Cabinet approves loan proposal for completion of Ganol Power Project

Syllad | The Rising MeghalayaSeptember 7, 2020

The state Cabinet on Monday approved the proposal to increase the borrowing limits of the Meghalaya Power Generation Corporation Limited (MePGCL) for the completion of the Ganol small hydro project stage-I by September 2022.

After the meeting, Power Minister James K Sangma told reports that the MePGCL has revised the cost of the project further from Rs 356.43 crore to Rs 507.71 crore based on the 2019 price level.

He said it was proposed before the cabinet to approve the revised cost estimate, 2019 for the completion of Ganol project stage-I, which is for 22.5 megawatts at Rs 507.71 crore, to approve a state development loan (SDL) at an amount of Rs 50.00 crore, to allow MePGCL to avail a loan for Rs 173.11 crore from financial institutions and to increase the borrowing limits of MePGCL for the purpose.

Sangma said that the cabinet was also informed about the views of the finance department, which has agreed to the proposal subject to certain conditions that the proposed SDL will be considered immediately to facilitate the recommencement of the work while in the meantime, the loan of Rs 173.11 crore can also be processed.

“Secondly, the interest and repayment of the SDL will have to be made by the MeECL and to ensure regular payment of the loan, a redemption reserve fund of 10 years is to be created. This account is to be operated jointly by MeECL and the finance department. Thirdly a loan agreement is to be executed between the MeECL and the state government to ensure redemption of the SDL,” he said.

The power minister also informed that the planning department also had certain conditions and one of them was that the proposed high powered committee (HPC) under the chairmanship of the chief secretary should also be asked to monitor the performance of the MePGCL with regards to the Ganol project and that the project should be completed by September 2022.

“Accordingly, the proposal was approved by the cabinet,” he said.

It may be mentioned here that the HPC was formed to monitor the performance of the MeECL to ensure that the long term loan of Rs 1345.71 crore to be availed by the MePDCL against the state government guarantee is regularly repay and the project management technical experts to be created under the planning department to support the HPC on its above task.

The Ganol project was accorded administrative approval in the year 2008.

The minister said that due to many reasons, the cost estimate of the project was revised in 2013 at Rs 332.68 crore based on the 2012 price level.

Then in 2014, the project cost had to be revised again on account of the increased in the cost of land as per the new land acquisition act, 2013 and it was revised to Rs 356.43 cr  and however administrative approval for this was accorded only in 2019.

In the meantime, the central water commission (CWC) which was a consultant for the propect revised the drawings and this led to the increase in the quantity of several components, Sangma said adding, this has led to MePGCL to revise the cost estimate of the project currently at Rs 507.71 crore.