Weak planning led to Myntdu project delay, cost overrun

SHILLONG: Lack of planning delayed the Myntdu Leshka Hydro Electric Project (MLHEP) works by 46 months and cost over-run of Rs 819.35 crore, the Comptroller and Auditor General has said in his report.
The report shows that against the generation cost of Rs 1.06 per unit as projected in the detailed project report, the actual generation cost went up to Rs 4.44 per unit, Rs 4.03 per unit and Rs 7.53 per unit during 2013-14,2014-15 and 2015-16, respectively.
Also, the DPR that was prepared in October 1998 was based on a few preliminary data on geological features obtained through a few drilled holes at the project site.
A detailed analysis of geological features viz soil and water quality and seismic impact, among others, at the planning stage, which was essential for successful implementation of the project       was completely missing.
According to the report, work order for implementation of the project was issued in March 2004 and work of excavation commenced in October 2004 by the contractor and at this stage the geological features of the site were obtained, data collected, analysed and tests were conducted by engaging agencies like IIT, Roorkee, Central Soil and Mineral Research Station, among others.
Based on the reports of these agencies, the dam axis was changed in August 2006, length of dam was increased and depth of the foundation blocks was also correspondingly increased to withstand earthquake.
As the water was found acidic, measures were also required to protect the structures such as increase in grade of concrete, Xypex painting, use of high quality corrosion resistant steel and surface coating.
“These changes in the designs had resulted in corresponding changes in the scope of work, which caused delay in implementation of the project besides increase in the project cost by Rs 121.20 crore on account of increase in the quantity of materials and cost escalation,” CAG stated.
The report further informed that at the planning stage, the scope of the project was restricted to setting up of only two units (2X42 MW) though there was scope for three units (3X42 MW).
Subsequently, while the construction of the project was in progress, it was decided in January 2008 to add one more unit citing inadequacy of the project capacity in view of acute shortage of power in the State.
While planning for the additional unit, it was projected that after commissioning of the project, construction cost per MW would be reduced from Rs 7.99 crore to Rs 6.24 crore.
The CAG report said the change in the scope of the project had necessitated modifications in the design of various components of the project causing time and cost overrun which entailed an additional expenditure of Rs 114.59 crore including ‘interest during construction’ of Rs 7.20 crore and as a result the actual cost of construction per MW was increased to Rs 10.29 crore as against the reduction to Rs 6.24 crore per MW anticipated while adding the third unit.
The report further pointed out that the project area was situated in the same hydrological belt of Cherrapunjee that experiences heavy rainfall and therefore it was necessary to take adequate precautionary measures to prevent loss to the plant due to floods.
However, during construction, two floods occurred – one on October 8, 2009, and the other on May 20, 2010 – causing loss of lives as well as damage to electrical equipment, further delaying completion by 15 months.
The height of the protection walls constructed under the project was not adequate to prevent flooding. So it had to be increased by three metres.
“Changes in the height of the protection wall at project implementation stage was indicative of deficiencies in preparation of DPR, which led to loss of lives and increase in the project cost by Rs 139.38 crore on account of escalation (Rs 32.81 crore), damages (Rs 12.13 crore), compensation (Rs 1.44 crore) and interest (Rs 93.00 crore), CAG stated.
The DPR for 84 MW (2X42 MW) was submitted to CEA for Techno Economic Clearance (TEC). The project was to be completed within a period of five years at a cost of Rs 363.08 crore.
The project was commissioned and synchronised to grid between November 2011 and March 2013 (Unit I in November 2011, Unit II in March 2012 and Unit III in March 2013). The total cost of the project on completion was Rs 1297.02 crore.