The World Bank has decided to curtail its US$437M loan to the Naptha Jhakri Hydro Electric Power Corporation (NJPC). The Bank’s decision will hamper the company’s 1500MW hydro project in Himachal Pradesh.
Among the reasons cited by the Bank for the decision were cost overruns, delays in the implementation schedule, and a major dispute on the height of the dam. The revised project cost is estimated at about US$1.5B, from the original cost of US$867.6M.
NJPC had already dispersed some US$300M in the venture. According to the original schedule the project was to be commissioned by December 1998 but it is now almost four years behind schedule.
It is expected to suffer further delay as the project committee has deferred its decision on the choice of cement for the first phase of the project. The committee has not been able to make up its mind between the use of fly-ash cement or the alternative slag cement for the diversion dam, which is part of the first phase.
