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Project Management of Small Hydropower Projects

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INTRODUCTION

In the recent years there has been a positive growth of the Indian economy. The infrastructure facilities

have not been able to keep pace with the growth rate and there are severe power shortages all around the

country.

While there is a thrust on increasing the installed capacity of the power projects, for many reasons this has

not happened. One such sector is the Hydropower sector. Many state Governments have granted

permissions and licenses to various organizations to construct, commission and operate the plant for certain

number of years and then transfer the same to the state Government.

Most of the developers who have

secured rights for the development of hydro power projects from the

respective state Governments, are facing several problems in developing and implementing them. The

hydropower projects require a mature understanding of the difficulties involved in setting up these projects

as they are subjected to considerable challenges from the nature and from the human settlements alike.

The nature presents risks like flooding, poor geology

and other adverse natural forces. Since the developers

have a limited knowledge and understanding of the problems and issues involved in setting up these

projects, there has not been much development worth its name to date in the hydropower sector for projects

allotted to IPPs. And whatever development has taken place, it has been done inefficiently with time and

cost overruns. Out of a few hundred small projects allotted by various state Governments only a few have

been able to generate power so far.

The four important reasons that can be singled out are the lack of knowledge to develop the projects, delays

in obtain ing Government Clearances and non-availability of the experienced engineers to construct and

commission the projects. The other problem is non-availability of quality contractors also.

Since the developers lack understandings of project management issues of the hydropower projects there

have been problems and delays in setting up these projects.

http://../contents.pol.invest.optnl.aspects.pdf

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2 TYPICAL COMPONENTS OF SMALL HYDRO POWER PROJECTS

i) Diversion Weirii) Desilting Basiniii) Water Conductor System.iv) Power Housev) Tail Race Tunnel or Channelvi) Switch Yardvii) Transmission line

3 STEPS INVOLVED IN CONCEPT TO COMMISSIONING

i) Design and Detailed engineering for the project.ii) Topographical, Geo-technical and Geological Survey of the project area.iii) Setting up of Gauge Discharge Site.iv) Conceptualization of Scheme.v) Confirmation of Layout on Ground. (This is not like marking a layout on a flat ground.

Involves lot of accurate detailed surveys)

vi) Detailed Project Report (DPR) and Approval of the Detailed Project Report from theconcerned Electricity Board or the concerned Government Authorities.

vii) Identification of Land.viii) Tender Documents for Civil works and E&M works.ix) Financial Closure.x) Construction and Commissioning.

4 PROJECT MANAGEMENT

The Project Management of a hydropower project consists of several actions that are required to be taken

for implementation of the project. These could be categorized as under:

i) Government Clearancesii) Survey and Investigationsiii) Implementation Scheduleiv) Bid evaluation for Civil Works, TG Equipments and TG Auxiliaries.v) Vendor identification for miscellaneous itemsvi) Procurement actionvii) Inspection of equipmentsviii) Construction supervisionix) Construction of transmission linex) Commissioning trialsxi) Commissioningxii) Carbon Credit validation

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5 NEED FOR PROJECT MANAGEMENT

In order to implement the project, a project management team needs to be created and put inposition to manage different aspects of the Project at different stages. These stages have been

described above.

In the present scenario it is difficult to find experienced professionals who can manage theprojects. The hydropower projects are fraught with several external and natural risks such as

Floods, Earthquake, Landslides and Social Unrest. These risks can be mitigated to a large

extent by the experienced project management team.

Until about a few years back almost the entire hydropower development has taken place in the

Government Sector. A very few professionals have ventured out of the Government Sector totaas up assignments in the private sector in India. The trend seems to be reversing slowly but

surely. Nevertheless it is going to take some more time. Every individual looks for the job

security. It is difficult for the small hydropower developers to provide comfort of job securityand career enhancement prospective; and therefore, they do not find the right professionals tomanage their projects and so the progress of work on these projects is slow.

If the projects are managed by the right professionals then there is less risk and the projectwould be commissioned on time. The early commissioning means that the revenues start

accruing early for the developer. The debt burden and the fixed expenses costs get reducedconsiderably.

This situation can be overcome by some agency which is willing to provide the ProjectManagement Services with experienced Engineers.

6 OUTSOURCING OF PROJECT MANAGEMENT WORKThe best course for the developers would be to engage an agency that has the experienced

hydropower professionals on its rolls to implement the project on their behalf.

There are several advantages in doing this:

Completion of project could be achieved in time. Early Accrual of Revenues.

Early start of repayment of Debt. Saves cost and time due to proper management of issues. No Permanent Liability of Project Management Staff. No fear of Attrition. Saves Recruitment and Retention Expenses.

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The approximate expenditure for effective project management has to be decided mutually

between the client and the service provider for the Project Management.

The costs of ProjectManagement Service Provider

may look high to some of the developers; essentially due to

lack of appreciation of the effort involved, but it should be realized that by doing the project

on time and by reaping the benefits early, these costs would be insignificant.

7 FINANCIAL IMPLICATION OF ENGAGING A PROJECT MANAGEMENT TEAM

Each hydroelectric project is a different project and needs different control mechanisms. Therequirement of manpower differs from one project to the other depending largely on the

topography and the components of the project.