Media reports indicate that the National Hydroelectric Power Corporation (NHPC) has been cautious of clearing cost escalation for various hydel projects anticipating adverse comments from the comptroller and auditor general (CAG) of India.
NHPC officials are dragging their feet in clearing cost escalations, which is a common trend in hydropower projects, fearing CAG.
With the NHPC having difficulty in approving cost escalation, contractors like HCC, Gammon India, Patel Engineering, and Jaiprakash Associates are said to be considering arbitration proceedings.
Owing to arbitration, the contingent liabilities of NHPC is pegged over Rs 10,000 crore, reports indicate. NHPC’s disputed dues as of now are double its revenue which was Rs 5,306 crore in 2012-13, reports show.
HCC has a total claim of Rs 1,396 crore under arbitration with NHPC while others like Jaiprakash, Gammon and Patel have claims in the range of Rs 150-350 crore in arbitration, said people familiar with the issue.
According to some reports, NHPC is referring to arbitration even for routine escalations that could be approved without any delay. The process may be transparent but is long and tedious which is hurting the cash-strapped infrastructure developers, reports indicate.
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