GANGTOK, : The Sikkim government is now entirely free from the staggering loans amounting to Rs. 3200 crore – taken by the previous government - by awarding its majority stake of Teesta-III hydel power project to the private power developer Greenko Group company, informed Chief Minister PS Golay on Wednesday.
Sikkim government owned 60.08% shares in Sikkim Urja Ltd which used to run the 1200 Mw Teesta-III hydel project till its dam in Chungthang was washed away by the October 2023 GLOF-triggered flash flood.
Responding to a media query, the Chief Minister shared that the previous State government took huge loans of Rs. 3200 crore from two public financial institutions for construction of the Teesta-III hydel power project.
The mega hydel power project was commissioned in 2017 with the Sikkim government having 60.08% stake.
However, as the Chief Minister had regularly stated, revenue coming from Teesta-III project was not enough to pay the loan instalments, especially during the wintry months when power generation declined. During this lean period, we took loans from State Bank of Sikkim amounting to Rs. 385 crore to pay the loan instalments…if we had not taken this measure, the project will have become a NPA (Non-Performing Asset) and our 60.08% shares will also go away, he said.
Though the Teesta-III project was gradually coming to a good position, calamity stuck in October 2023 when a massive flash-flood washed away its dam at Chungthang, causing widespread devastation downstream.
Following this, the Sikkim government requested the Centre and the two financial institutions for loan waiver, subsidies and support. The Sikkim government was assured to be granted all forms of support under the NDMA to mitigate the infrastructural damages. However, the loan waiver request was not supported and the State government was informed that it has to repay the loans taken from the two financial institutions.
Subsequently, the Teesta-III project shares of the Sikkim government were awarded to Greenko company, the second largest shareholder in the project.
“This project will take another five years to be rebuilt and till then, from where we will pay the huge loans? So in the interest of Sikkim, we gave this project in the same arrangement with other developers like NHPC where the State receives 12% power free. With this, the entire loan (of Teesta-III project) does not come to us and Sikkim has become entirely free from the loans of Rs. 3200 crore. There is no outstanding loan on Sikkim. After it (Teesta-III) is built, we will also get 12% power free,” said the Chief Minister.
The Chief Minister maintained that even if the State government had kept its majority ownership of Teesta-III project, the government would not have got any returns till 2047 as the revenue goes to repaying the loans.
Greenko was the second largest shareholder in the Teesta-III project.
It was the previous government which had done the agreement that the State’s shares of Teesta-III project, if needed to be given, will be given to the second largest shareholder and we acted on this basis, said Golay.
The Chief Minister reiterated that the previous SDF government’s mistake was responsible for the collapse of Teesta-III dam.
“Due to the previous government’s mistake, a rock-filled dam was filled instead of a concrete dam. If the concrete dam was built then such huge damage would not have taken place. The dam got washed out because it was a rock-filled dam,” said Golay.
The Teesta-III hydel power project is in discussions at present following the controversial clearance given by an Environment ministry-appointed panel to a new
dam. The private developer has proposed to build a new 118.64-m-high concrete gravity dam which was approved by the ministry’s Expert Appraisal Committee.
Opposition political parties have strongly criticized the approval, maintaining that it was done without a public hearing and taking into account the latest scientific data besides ignoring the persisting GLOF risks. They are demanding that a fresh public hearing is conducted to engage the people of Sikkim in this crucial decision.
State BJP president DR Thapa has written to Prime Minister Narendra Modi to direct an immediate withholding of the EAC clearance for the Teesta-III project until all necessary scientific reviews, including the revised Probable Maximum Flood (PMF) study, are completed and independently validated. He further requested a fresh and comprehensive Environmental Impact Assessment (EIA) to incorporate recent climate data, GLOF risks, and Sikkim’s evolving ecological challenges.
BOX
“Sikkim has become entirely free from the loans of Rs. 3200 crore taken by the previous government for Teesta-III project. There is no outstanding loan on Sikkim. After it is built, we will also get 12% power free,” - Chief Minister PS Golay.
