Rampur Hydropower Project

September 13, 2007

Rampur Hydropower Project

The Government of India has requested the World Bank’s assistance to finance the proposed Rampur Hydropower Project (Rampur Project) being built on the upper reaches of the Sutlej river in the Shimla and Kulu districts of Himachal Pradesh. The Project is being developed by the Satluj Jal Vidyut Nigam Limited (SJVN -- previously known as the Nathpa Jhakri Power Corporation, NJPC), a joint venture between the Government of Himachal Pradesh and the Government of India.

The 412 Megawatt (MW) Rampur Hydropower Project is planned as a cascade plant to India’s largest hydroelectric power plant, the 1,500 MW-Nathpa Jhakri plant. A 15-km underground tunnel will carry water emerging from the Nathpa Jhakri plant and bring it downstream to a powerhouse located near Bael village in Kulu district. As it uses de-silted water from the Nathpa Jhakri plant, the Rampur Project will not involve the construction of any dam, or reservoir or de-siltation chamber; nor will any land be inundated for the scheme.

The Rampur Project is expected to generate about 1,770 million units of electricity each year, which will feed into the Indian energy system through the Northern Region Electricity grid and help improve the quality of electrical supply to consumers, especially at peak-load times. Twelve percent of the total power generated at the plant will be passed on free to the state of Himachal Pradesh as royalty – the estimated annual value of this is around Rs 530 million. Himachal Pradesh can then choose to further sell the power to other states or else utilize it for meeting its own energy needs. In addition, in recognition of its investment in the project, the state of Himachal Pradesh will receive an additional allocation of around 109 MW of power and will also receive dividends from the project. The state will also be entitled to a share in the remainder of the power generated from the project.

The Project will also have significant environmental benefits. If a coal or oil-fired thermal plant of the same capacity were to be built instead of the Rampur hydro project, the emission of greenhouse gases would add about 12,000 tons of sulphur oxides, 6,000 tons of nitrogen oxides, and about 2 million tons of carbon dioxide into the atmosphere each year. By building and operating the Rampur hydropower plant, this pollution is being avoided.

Resettlement & Rehabilitation

The location and design of the Rampur Project have been finalized with the aim of minimizing adverse impacts on local people and their natural environment. Some 79 hectares spread across eight panchayats was acquired for the Project; of this, 49 hectares is forest land (although largely without forest cover) belonging to the Himachal Pradesh state government and some 30 hectares is private land belonging to 141 families comprising 167 landowners.SJVN’s corporate policies, taken together with the World Bank’s safeguard policies that govern resettlement and rehabilitation (R&R), have ensured that an equitable system of R&R and benefit-sharing is worked out for people affected by the Rampur Project. SJVN staff has consulted comprehensively with the project-affected people (PAPs), explaining the necessity of the Project, discussing with them the options for resettlement and rehabilitation as well as local area development. The Resettlement Action Plan and the Sustainable Community Development Plan that govern these initiatives are available at the site Public Information Center in Bael village, in public libraries at Rampur and Shimla, on SJVN’s website and from the World Bank's InfoShop.

The displaced families who will lose their houses will each get a plot of 280 sq. meters at a site of their choice on which to build their new houses. The families had a choice of options including that of a developed house or a plot, but all chose to construct their own houses. They will be given monetary help for the construction of 60 sq.meters of built up plinth area on which to construct their new homes, as well as a monthly rental allowance to help them tide over the period of construction (18 months) in a rented house. Each family will also receive a lump sum amount to help them meet the costs of shifting from one house to another.

A special package has been worked out for those 35 families who will be left with less than five bighas of land after the project has acquired their land it needs. Apart from the compensation for the acquired land, they will also receive a rehabilitation grant, depending on the amount of land left with them after acquisition. In order to help the PAPs recover from any loss of livelihood and also in order to help those interested in setting up additional income-generation schemes, SJVN will also offer seed money of upto Rs 30,000.

The Company has also undertaken to give preference to suitably-qualified candidates from landless families whenever a job opening comes up. The contractors working on the civil works of the Project have also been directed to give preferential employment to people from the project-affected area while hiring labor. All petty contracts on the Project upto a value of Rs 1 million are also being earmarked for PAPs. About Rs 12 million of such contracts have already been awarded to PAPs and more worth Rs 95 million have been given to people from other parts of Himachal Pradesh. Children from project-affected families and areas are being offered merit scholarships to acquire technical and vocational skills and the first batch of 35 students, including four girls, are already receiving training in a variety of trades.

Benefit Sharing

The villages impacted by the project – Fatti Bayal, Fatti Nirmand, Fatti Kushwa, Fatti Tunan, Fatti Poshana, Gadech (Koel), Duttnagar -- have also been ear-marked for special development assistance

SJVN has set aside Rs 125 million to be invested over a period of five years in infrastructure and development schemes for these villages, out of which Rs 6.20 million (out of the first-year budget of Rs 25 million) has already been spent/ works in progress. Thereafter, the villages will get Rs 7.5 million each year in perpetuity. Here again, the people have led the local area development exercise, choosing the infrastructure schemes they would like to see implemented in their villages. From street-lighting, through improved water supply to footpaths and footbridges, the villagers have identified their particular needs which are being funded by the scheme. The Company also runs a mobile health van that does the rounds of the project-affected villages taking basic healthcare to the doorstep of people living in remote areas and the Project is also setting up a dispensary at Bael village, the site of the proposed powerhouse for the Rampur Project.

SJVN, which as the developer of the already-operational Nathpa Jhakri Project has a long-standing relationship with the region, is also helping improve the quality of people’s lives beyond the project-affected villages. The Company is helping finance the renovation of the bus-stand at Rampur town; it is also helping build several access roads and bridges and helping improve infrastructure in local schools.

Benefits to Himachal Pradesh

Apart from the 12 percent free power it receives as royalty (worth approximately US$13 million or Rs 530 million annually at current prices), the host state of Himachal Pradesh will also get an additional 30 percent of power generated at Rampur project (109 MW) at cost; this is equivalent to its share of equity percentage in the project. And, as part owner of SJVN, the company developing the Rampur Project, Himachal Pradesh will also receive dividends on its investment in the project and also be entitled to a share in the remainder of the power generated from the project.

The state also stands to gain in terms of job creation and income-generation. The Rampur Project has already generated some 2,500 man-months of work for the people of Himachal Pradesh over the last one year and some Rs 107 million of petty contracts on the Project have already gone to people belonging to the state. So far 145 members of the families affected by the project were offered work under contractors.

Environmental Issues

In a bid to assess and mitigate possible environmental fallouts of building and operating the Rampur

Project, SJVN has undertaken a series of detailed studies that look into environmental aspects ranging from river flow, terrestrial biodiversity, forest impacts, etc. Baseline data on all these aspects has been collected by qualified teams, the findings and mitigating strategies have been discussed with experts as well as local communities, and an Environmental Management Plan (EMP) prepared. These documents can be accessed at the site PIC at Bael village, on SJVN's website and as well as from the World Bank's InfoShop.

Under the EMP, the Project will ensure that the minimum flow of water needed in the river Sutlej to preserve its aquatic balance is maintained. Also, in order to compensate for any adverse impact on the natural biodiversity of the region, the Project is helping the state forest department plant new forest cover and re-develop degraded forests through a Rs 66 million-compensatory afforestation scheme. A Catchment Area Treatment Plan has also been worked out and SJVN has made available a sum of Rs 220 million to the Himachal Pradesh government for activities that will include not just the planting of new trees in the region but also a host of other initiatives – like building check dams, retention walls, village tanks and ponds and plugging mountain gullies – to help prevent soil erosion and water conservation in this ecologically-sensitive area.

The project will also treat landslide-prone areas in the vicinity to prevent further degradation of the mountainside and effective disposal of sewage and construction debris will ensure that the project does not add to the pollution of either the river or the natural environment. The Plan will also cover environment-awareness activities, including convincing villagers to grow fodder on their farms in order to reduce grazing pressure on the forests, as well as to switch to solar cookers to reduce their foraging for firewood.

Dam Safety

Although the Rampur Project has no dam, both the Rampur and the Nathpa Jhakri projects depend for their water on the small reservoir entrained behind the Nathpa dam, which is situated deep in the canyon of the Sutlej river, upstream of the Rampur Project.

The dam at Nathpa is only 60 meters high and was built to a very rigorous specification and constructed following the World Bank policy on safety of dams. It is a steel-reinforced concrete gravity dam, with its foundations built into an excavation in the bedrock of the river. It has been designed to withstand the pressure of the water in the reservoir even during the unlikely event of an earthquake.

To further ensure its safety and water-tightness the dam abuts the riverbanks at a carefully chosen location on the Sutlej river, where the river canyon has strong shear walls. During its construction, a panel of experts was employed to advise SJVN on all aspects of construction of the dam as well as the underground works. Thus for the Rampur Project, dam safety aspects needed only to be re-confirmed; and accordingly, SJVN has engaged the Dam Safety Organization, Pune, which has examined and confirmed the safety of dam with respect to it stability, its instrumentation and its maintenance.

World Bank Statement on the Assessment of the Rampur Hydropower Project

May 2010: The World Bank has an established internal system of regularly reviewing the implementation progress of every project that it supports. The last such review of the Rampur Hydropower Project, being developed by SJVN Ltd (SJVNL) on the Sutlej river, indicated that the project was facing certain challenges in meeting its progress targets under difficult geological conditions.

The assessment made during this review was aimed at focusing the efforts of both the Bank and SJVNL on finding appropriate solutions to meet these challenges. SJVNL has, in consultation with the World Bank, drawn up an action plan to bring the project progress back on track. Once the implementation progress is satisfactory, the assessment will be revised upwards. As per World Bank financing terms, this assessment has no financial implications for the company.

For more information, please contact Sona Thakur: sthakur1@worldbank.org.