Completion Report. Project Number: Loan Number: 1405 September India: Power Transmission (Sector) Project

Transcription

1 Completion Report Project Number: Loan Number: 1405 September 2005 India: Power Transmission (Sector) Project

2 CURRENCY EQUIVALENTS Currency Unit Indian rupee/s (Re/Rs) At Appraisal At Project Completion (30 September 1995) (9 July 2003) Re1.00 = $0.032 $0.021 $1.00 = Rs31.40 Rs48.27 ABBREVIATIONS ABT availability-based tariff AC alternating current ADB Asian Development Bank CERC Central Electricity Regulatory Commission EIRR economic internal rate of return EMS energy management systems FIRR financial internal rate of return GBPP gas-based power plant HVDC high voltage direct current ICB international competitive bidding ICT interconnecting transformer IDC interest during construction IPP independent power producer LILO loop-in loop-out NEEPCO North Eastern Electric Power Company Ltd NER northeastern region NHPC National Hydroelectric Power Corporation Ltd PLCC power line carrier communication PLF plant load factor POWERGRID Power Grid Corporation of India Ltd RSCC regional system control center RTU remote terminal unit SCADA supervisory control and data acquisition system SEB state electricity board TA technical assistance

3 WEIGHTS AND MEASURES A (ampere) unit of current cct km circuit kilometers GW (gigawatt) 1,000 MW GWh (gigawatt-hour) 1,000,000 kwh kv (kilovolt) 1,000 volts kva kilovolt ampere kw (kilowatt) 1,000 watts kwh (kilowatt-hour) 1,000 Wh MVA mega volt ampere MVAR mega volt ampere reactive MW (megawatt) 1,000 kw t metric ton V (volt) unit of electrical pressure W (watt) unit of real power Wh (watt-hour) unit of electrical energy NOTES (i) (ii) The fiscal year (FY) of the Government of India ends on 31 March. FY before a calendar year denotes the year in which the fiscal year ends. For example, FY2005 begins on 1 April 2004 and ends on 31 March In this report, $ refers to US dollars.

4 BASIC DATA MAPS CONTENTS Page iii ix I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 2 A. Relevance of Design and Formulation 2 B. Project Outputs 3 C. Project Costs 6 D. Disbursements 7 E. Project Schedule 7 F. Implementation Arrangements 9 G. Conditions and Covenants 9 H. Related Technical Assistance 9 I. Consultant Recruitment and Procurement 10 J. Performance of Consultants, Contractors, and Suppliers 10 K. Performance of the Borrower and the Executing Agency 10 L. Performance of the Asian Development Bank 11 III. EVALUATION OF PERFORMANCE 11 A. Relevance 11 B. Efficacy in Achievement of Purpose 12 C. Efficiency in Achievement of Outputs and Purpose 12 D. Preliminary Assessment of Sustainability 12 E. Environmental, Sociocultural, and Other Impacts 13 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 15 A. Overall Assessment 15 B. Lessons Learned 16 C. Recommendations 16 APPENDIXES 1. Chronology of Main Events in Project Implementation Cost Breakdown by Project Components Project Costs and Summary of Contracts Annual Average Exchange Rates Project Financing Plan Projected and Actual Disbursements of Loan Proceeds Implementation Schedule Organization Chart and Project Implementation Structure Status of Compliance with Major Loan Covenants Financial and Economic Evaluation Summary of Environmental and Social Impact Assessment Quantitative Assessment of Overall Project Performance 53

5 ii CONTENTS Page SUPPLEMENTARY APPENDIXES (available upon request) A. Balance Sheets 54 B. Income Statements 55 C. Sources and Uses of Funds 56 D. Recent Policy Initiatives in Indian Power Sector 57

6 iii BASIC DATA A. Loan Identification 1. Country India 2. Loan Number 1405-IND 3. Project Title Power Transmission (Sector) Project 4. Borrower Power Grid Corporation of India Limited 5. Executing Agency Power Grid Corporation of India Limited 6. Amount of Loan (net after cancellations) $ million First Cancellation $9.00 million 17 October 2002 Second Cancellation $6.50 million 20 February 2003 Third Cancellation $7.52 million 9 July Project Completion Report Number PCR: IND 915 B. Loan Data 1. Appraisal Date Started 20 September 1994 Date Completed 29 September Loan Negotiations Date Started 10 October 1995 Date Completed 12 October Date of Board Approval 16 November Date of Loan Agreement 18 July Date of Loan Effectiveness In Loan Agreement 16 October 1996 Actual 16 October 1996 Number of Extensions None 6. Closing Date In Loan Agreement 31 March 2001 Actual 9 July 2003 Number of Extensions 1 7. Terms of Loan Interest Rate 6-month variable ordinary capital resources (OCR) rate Maturity (number of years) 20 years Grace Period (number of years) 4 years 8. Terms of Relending (if any) Not applicable 9. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 25 October July Months

7 iv Effective Date Original Closing Date Time Interval 16 October March Months b. Amount ($ million) Category or Subloan Original Allocation Last Revised Allocationª Amount Cancelled Amount Disbursed Undisbursed Balance 1. Project Expenditure Interest During Construction Total ª Last revised allocation completed on 1 August Source: Controller s Department, Asian Development Bank, Manila. 10. Local Cost (ADB financed) 0 C. Project Data 1. Project Cost ($ million) Cost Appraisal Estimate Actual Foreign Exchange Cost Local Currency Cost Total Sources: Asian Development Bank estimates and data from POWERGRID. 2. Financing Plan ($ million) Appraisal Estimate a Actual Cost Foreign Local Total Foreign Local Total Implementation Costs ADB-Financed POWERGRID Domestic Borrowing IDC Costs ADB-Financed POWERGRID Domestic Borrowing Total ADB = Asian Development Bank, POWERGRID = Power Grid Corporation of India Limited, IDC = interest during construction. a Including the cost estimates of additional subprojects approved in Source: Asian Development Bank estimates.

8 v 3. Cost Breakdown by Project Components ($ million) Appraisal Estimate Actual Component Foreign Local Total Foreign Local Total A. Base Cost 1. Augmentation of Northeastern Transmission System 2. Agartala Transmission System Kopili Stage-I Extension Transmission System 4. Northeastern Regional System Coordination Center (RSCC) 5. Unchahar Stage-II Transmission System 6. Vindhyachal Stage-II Transmission System 7. East South Interconnector Grid Strengthening for North Bengal 9. Grid Strengthening for North Bihar 10. Grid Strengthening for West Bengal 11. Grid Strengthening for Orissa Consultancy Services Subtotal (A) B. Contingencies 1. Augmentation of Northeastern Transmission System 2. Agartala Transmission System Kopili Stage-I Extension Transmission System 4. Northeastern Regional System Coordination Center (RSCC) 5. Unchahar Stage-II Transmission System 6. Vindhyachal Stage-II Transmission System 7. East South Interconnector Grid Strengthening for North Bengal 9. Grid Strengthening for North Bihar 10. Grid Strengthening for West Bengal 11. Grid Strengthening for Orissa Subtotal (B) C. Interest During Construction Subtotal (C) Total Source: Asian Development Bank estimates.

9 vi 4. Project Schedule Appraisal Estimate Actual Item Start End Start End Augmentation of Northeastern Transmission System Pre-award activities, including engineering, Mar 1994 Jun 1995 May 1994 Jun 1995 preliminary site survey, preparation of cost estimates and tender specifications, and issue of tender notices Opening of bids, evaluation, approval, and award of Sep 1995 Mar 1996 Oct 1995 May 1996 contract Supply of equipment, installation, testing, and Apr 1996 Sep 1998 Jun 1996 Dec 1999 commissioning Agartala Transmission System Pre-award activities including engineering, Mar 1994 Jun 1995 Mar 1994 Jun 1995 preliminary site survey, preparation of cost estimates and tender specifications, and issue of tender notices Opening of bids, evaluation, approval, and award of Sep 1995 Mar 1996 Oct 1995 May 1996 contract Supply of equipment, installation, testing and Apr 1996 Sep 1998 Jun 1996 Nov 2000 commissioning Kopili Stage-I Extension Transmission System Pre-award activities, including engineering, Mar 1994 Jun 1995 Mar 1994 Jun 1995 preliminary site survey, preparation of cost estimates and tender specifications, and issue of tender notices Opening of bids, evaluation, approval, and award of Sep 1995 Mar 1996 Oct 1995 May 1996 contract Supply of equipment, installation, testing, and Apr 1996 Jun 1997 Jun 1996 Jul 1998 commissioning Northeastern Regional System Coordination Center (RSCC) Pre-award activities, including engineering, Mar 1994 Sep 1995 Mar 1994 Jun 1997 preliminary site survey, preparation of cost estimates and tender specifications, and issue of tender notices Opening of bids, evaluation, approval, and award of Dec 1995 Dec 1996 Aug 1997 May 2000 contract Supply of equipment, installation, testing, and Jan 1997 Mar 2000 May 2000 May 2003 commissioning East-South Interconnector Pre-award activities, including engineering, Mar 1994 Jun 1995 Mar 1994 Aug 1995 preliminary site survey, preparation of cost estimates and tender specifications, and issue of tender notices Opening of bids, evaluation, approval, and award of Sep 1995 Jan 1996 Dec 1995 Dec 1996 contract Supply of equipment, installation, testing, and Feb 1996 Mar 1999 Jan 1997 Mar 1999 commissioning Vindhyachal Stage-II Transmission System Pre-award activities, including engineering, Jan 1994 Sep 1995 Jan 1994 Aug 1995 preliminary site survey, preparation of cost estimates and tender specifications, and issue of tender notices Opening of bids, evaluation, approval, and award of Dec 1995 Jun 1996 Dec 1995 May 1996 contract Supply of equipment, installation, testing, and Jun 1996 Mar 1999 Jun 1996 Oct 1999 commissioning Unchahar Stage-II Transmission System Pre-award activities, including engineering, preliminary site survey, preparation of cost estimates and tender specifications, and issue of tender notices Oct 1994 Oct 1995 Oct 1994 Jan 1996

10 vii Appraisal Estimate Actual Item Start End Start End Opening of bids, evaluation, approval, and award of contract Jan 1996 Jun 1996 May 1996 Nov 1997 Supply of equipment, installation, testing, and Jul 1996 Jun 1999 Dec 1997 Dec 1999 commissioning Consulting Services for RSCC Pre-award activities, including scope of services, Jul 1995 Sep 1995 Jul 1995 May 1997 preparation of cost estimates and tender specifications; and issue of request for proposals Opening of bids, evaluation, approval, and award of Sep 1995 Jun 1996 Aug 1997 Jul 1998 contract Delivery of consulting services Jul 1996 Mar 1997 Aug 1998 Sep 2003 Grid Strengthening for North Bengal Pre-award activities, including engineering, Jan 1998 Oct 1998 Jan 1998 Dec 1998 preliminary site survey, preparation of cost estimates and tender specifications, and issue of tender notices Opening of bids, evaluation, approval, and award of Jan 1999 May 1999 Feb 1999 May 2000 contract Supply of equipment, installation, testing, and May 1999 Jan 2002 Jun 2000 Dec 2002 commissioning Grid Strengthening for North Bihar Pre-award activities, including engineering, Jan 1998 Oct 1998 Jan 1998 Dec 1998 preliminary site survey, preparation of cost estimates and tender specifications, and issue of tender notices Opening of bids, evaluation, approval, and award of Jan 1999 May 1999 Feb 1999 May 2000 contract Supply of equipment, installation, testing, and May 1999 Jan 2002 Jun 2000 Oct 2003 commissioning Grid Strengthening for West Bengal Pre-award activities, including engineering; Jan 1998 Oct 1998 Jan 1998 Dec 1998 preliminary site survey; preparation of cost estimates and tender specifications; and issue of tender notices Opening of bids, evaluation, approval, and award of Jan 1999 Mar 1999 Feb 1999 Mar 2000 contract Supply of equipment, installation, testing, and Apr 1999 Mar 2001 Apr 2000 Jun 2003 commissioning Grid Strengthening for Orissa Pre-award activities, including engineering, Jan 1998 Oct 1998 Jan 1998 Dec 1998 preliminary site survey, preparation of cost estimates and tender specifications, and issue of tender notices Opening of bids, evaluation, approval, and award of Jan 1999 Mar 1999 Feb 1999 Mar 2000 contract Supply of equipment, installation, testing, and Apr 1999 Mar 2001 Apr 2001 Sep 2002 commissioning Source: Power Grid Corporation of India Limited. 5. Project Performance Report Ratings Ratings Implementation Period Development Objectives Implementation Progress (i) From 1 Jan 1997 to 31 Dec 1999 S S Overall Rating (ii) From 1 Jan 2000 to 9 Jul 2003 S HS = highly satisfactory, S = satisfactory. Source: Project Performance Reports of the Asian Development Bank.

11 viii D. Data on Asian Development Bank Missions Name of Mission Date No. of No. of Specialization Persons Person-Days of Membersª Fact Finding May a, b, e Reconnaissance 23 Nov 8 Dec b, c, e, h, i Follow-up June b, j Pre appraisal August b, c, e, h, k (was upgraded to Appraisal Mission in April 1995) Follow-up 6 17 February a, b Inception 21 Feb 4 March a, e, f, g Review 1 25 Nov 5 Dec a, g, m, n Review December a, l Review May g Review October g Review Dec g Project Completion 2 11 a, e Review Mission b 26 April 1 May May May 2005 ª a = engineer, b = financial specialist, c = counsel, d = economist, e = procurement and/or consultant specialist, f = control officer, g = program officer, h = environmental specialist, i = investment officer, j = manager, k = mission secretary, l = project analyst, m = young professional, and n = assistant. b This report was prepared by V. Rao Karbar (Mission Leader), Project Implementation Officer (Energy), India Resident Mission (INRM); and a staff consultant. Source: Back-to-Office-Reports of the Asian Development Bank.

12 91 o 00'E o 96 00'E I N D I A POWER TRANSMISSION SECTOR PROJECT AUGMENTATION OF NORTHEASTERN TRANSMISSION SYSTEM, AGARTALA AND KOPILI TRANSMISSION SYSTEMS 28 o 00'N B H U T A N Daporjo Along Pasighat Tezu 28 o 00'N Agia Tura Bornagar Amingaon Rangia Lhao Tenga Rowta Banpara Komeng Tejpur Samagur Jagiroad Guwahati Chandrapur ASSAM Longpi Kopili Umtru New Umiam Kydemkulai MEGHALAYA Umiam Umrangoy Khliehriat Nangal Bibra Shillong Seppa Lanka Itanagar Kopili Khandong Ziro ARUNACHAL PRADESH Dibrugarh Jonai Ranganadi North Lakhmipur Gohpur Bokajan Misa Dimapur Diphu Golaghat Kohma Dhemajai Silapathar Mariani Doyang NAGALAND Dimapur Kiphire Lakwa Namirup Mokokchung Tinsuka Kathalguri Deomali Khonsa Miao MYANMAR Cherrapunji MANIPUR 23 o 00'N N Kailashahar Kamalpur Khowal Agartala Agartala GPP Dharnagar Dullabchera Ambassa TRIPURA Monarchar Rokhia Kilometers Kumaghat Kolasib W. Phaileng Haflong Imphal Pilapool Loktak Aizwal MIZORAM Aizwal (Zemabawk) Saitual Marpara Serchip Lungsen Khawzawl Lunglei Luwinglai Lungdare Imphal Ning Thoubal Kakching Thoukhong Churachandpur Substation Thermal/Gas Power Station Hydroelectric Power Station Augmentation of Transmission System in South Assam, Mizoram and Tripura Agartala Transmission System Kopili Expansion Stage - I Transmission System 400 kv Transmission Line (Existing) 220 kv Transmission Line (Existing) 132 kv Transmission Line (Existing) 23 o 00'N 220 kv Transmission Line (Under Construction/Approved) 132 kv Transmission Line (Under Construction/Approved) State Boundary International Boundary Boundaries are not necessarily authoritative. 91 o 00'E o 96 00'E RM

13 83 o 00 E Ballabhgarh I N D I A POWER TRANSMISSION SECTOR PROJECT UNCHAHAR STAGE-II TRANSMISSION SYSTEM Chamera II HIMACHAL PRADESH I Baraisul Parbati - II 5 III Parbati - III PAKISTAN Dasuya Pong Pooling Point Hamirpur Dehar N. Jhakri Amritsar Koldam 31 o Jalandhar 00 N 6 1 PEOPLE'S REPUBLIC OF CHINA Ludhiana Tehri P U N J A B Patiala Moga Malerkotla Koteshwar 7 Rishikesh Dhauliganga Fatehbad Hissar Bhiwani Pithorgarh UTTARANCHAL Bareilly Tanakpur (PG) 2 Kitchcha Bareilly UTTAR PRADESH Substation Hydroelectric Power Station Thermal/Gas Power Station SEB 400 kv Transmission Line (Existing) Power Grid 400 kv Transmission Line (Existing) Power Grid 400 kv Transmission Line (Under Construction/Proposed) SEB 765 kv Transmission Line (Existing) 220 kv Transmission Line (Existing) 220 kv Transmission Line (Under Construction/Proposed) Unchahar Transmission System 765 kv Transmission Line (Existing) 765 kv Transmission Line (Under Construction/Proposed) Series Capacitor High Voltage Direct Current Back to Back High Voltage Direct Current Bipole State Boundary International Boundary Boundaries are not necessarily authoritative. 31 o 00 N d RM Jodhpur 74 o 00 E Udaipur RAJASTHAN Merta Bhilwara Kankroli Chittorgh h Jaipur (RSEB) Dausa Kota Nagda Anta RAPP-C RAPP-B 74 o 00 E Bhiwadi Jaipur Agra Gwalior 18 Auraiya MADHYA PRADESH Mainpuri Kanpur N Kilometers Lucknow Naubasta Unchahar Allahabad Lucknow (New) Singrauli Sultanpur Varansi CHHATTISGARH Obra Gorakhpur (UPPCL) Azamgarh Mau Anpara 83 o 00 E Balia Rihand Vindhyachal Sasaram Muzaffarpur Barh Patna Biharshariff BIHAR 1. Kunihar 2. Muradabad 3. Kishenpur 4. Udhampur 5. Sarna 6. Nalagarh 7. Abdullapur 8. Panipat 9. Bawana 10. Bamnauli 11. Panki 12. Unnao 13. Muradnagar 14. Mandaula 15. Merrut 16. Muzaffar Nagar 17. Kaithal 18. Agra (UP) 19. Dadri 20. Bahdurgarh 21. Roorkee 74 o 00 E

14 72 o 00 E 80 o 00 E PAKISTAN RAJASTHAN Gwalior I N D I A POWER TRANSMISSION SECTOR PROJECT VINDHYACHAL STAGE -- II TRANSMISSION SYSTEM UTTAR PRADESH 25 o 00 N A r a b i a n Zerda Ranchodpura Limbdi GUJARAT Rajkot Nardipur Dehgam Karamsad Wankbori Jetpur Amreli Gandhar (GEB) Gandhar Bharuch Ukai Utran Kawas Kakrapar Valthan Navsari Magarwada Vapi Kharadpada Khadoli Tarapur Ext. Boisar S e a Kalwa Nagothane Dhabol Sardar Sarovar Koyna Padghe Pune Karad Rajgarh Dhule Lonikhand Pandharpur Bableshwar Nagda Narmada Sagar Bhusawal MAHARASHTRA Aurangabad Parli Sholapur Indore Shujalpur Khandwa Akola New Parli Substation Bina Bhopal Jabalpur Birsinghpur Itarsi MADHYA PRADESH Satpura Seoni Wardha Koradi Chandrapur STPS Damoh Satna Pench Bhadravati To Ramagundam ANDHRA PRADESH Bhilai Vindhyachal Korba Sipai Bhatapara CHHATTISGARH Raipur Singrauli Korba (STPS) ORISSA Raigarh JHARKAND Ranchi Rourkela 25 o 00 N 765 kv Power Grid (Under Construction/Proposed) 16 o 00 N N Kolnapur KARNATAKA Thermal/Gas Power Station 220 kv Power Grid (Under Construction/Proposed) Vindhyachal Stage-II Transmission System Series Capacitor 16 o 00 N 220 kv Transmission Line High Voltage Direct Current Back to Back GOA Mapusa 400 kv Power Grid High Voltage Direct Current Bipole 400 kv State Electricity Board State Boundary c RM Kilometers 72 o 00 E 400 kv Power Grid (Under Construction/Proposed) International Boundary 400 kv State Electricity Board Boundaries are not necessarily authoritative. (Under Construction/Proposed) 80 o 00 E

15 82 o 00 E I N D I A 87 o 00 E POWER TRANSMISSION SECTOR PROJECT GRID STRENGTHENING SCHEMES FOR EASTERN REGION AND EAST - SOUTH INTERCONNECTOR NEPAL Teesta SIKKIM SILIGURI Tala Chukha BHUTAN Singigaon 25 o 00 N Gorakpur Hazipur Muzaffarpur Conductor Change PURNEA Purnea Siliguri Dalkhola Birpara Bongaigaon MEGHALAYA 25 o 00 N To Balia (NR) To Allahabad (NR) Arrah Khagaul Fatwa Patna Barh Begusarai BIHAR Kahalgaon MALDA To Sahupuri (NR) To Rihand (NR) Dehri Karamnasa Nabinagar Garwa NKSTPP Bodhgaya Biharshariff Bokaro Tenughat Maithon K neswari Cn pura Lalmatia Farraka Maithon-RB Sagardighi Mejia Gokarna Durgapur Waria Bidhannagar BANGLADESH Patratu Ramgarh Santaldih Bakeswar To Siptat (WR) JHARKHAND Ranchi Jeerat CHHATTISGARH Chandi WEST BENGAL Arambag Howrah Kasba Subhasgram 19 o 00 N To Kolar (SR) To Korba (WR) To Raipur (WR) Balimela Bolangir Indravati JEYPORE U. Kholab Gazuwaka Gazuwaka (SR) Brajrajnagar IN VALLEY Hirakud Tarkera Bhanjanagar Theruvelli Rourkela Talcher (NTPC) Meramundli ORISSA N Rengal Aska Joda Nalco Nayagarh Behrampur Talcher Chhatrapur Kilometers Bhadrak Daitari Paradeep Chandaka Bhubaneswar B a y o f B e n g a l Baripada Balasore Kolaghat Substation Hydroelectric Power Station Thermal/Gas Power Station Series Capacitor Second ICT at Malda and Jeypore High Voltage Direct Current Back to Back (Under Construction/Approved) High Voltage Direct Current Bipole (Under Construction/Approved) Jeypore-Gazuwaka 400 kv D/C Line Lilo of One Circuit of Bongaigaon-Malda 400 kv D/C at Siliguri Lilo of Other Circuit of 19 o 00 N Bongaigaon-Malda 400 kv D/C at Purnea 400 kv Transmission Line (Existing) 220 kv Transmission Line (Existing) 132 kv Transmission Line (Existing) 765 kv Transmisison Line (Under Construction/Approved) 400 kv Transmission Line (Under Construction/Approved) 220 kv Transmission Line (Under Construction/Approved) State Boundary International Boundary Boundaries are not necessarily authoritative. 82 o 00 E 87 o 00 E ba RM

16 I. PROJECT DESCRIPTION 1. The objectives of the Project were to strengthen the transmission systems of Power Grid Corporation of India Limited (POWERGRID) in order to reduce system losses and allow efficient utilization of existing and planned power plants by (i) supporting development of the northeastern regional power grid, (ii) interconnecting the southern and eastern regional power grids, (iii) constructing transmission facilities for power evacuation from new and expanded power plants, and (iv) providing consulting services. The broader indirect objectives, being pursued in the policy dialogue with the Government, included (i) supporting the restructuring of India s power sector by facilitating unbundling of generation, transmission, and distribution, and the entry of independent power producers (IPPs); (ii) putting all bulk power supply and transmission on a sound economic basis by putting in place appropriate pricing; and (iii) putting all transmission transactions on a sound commercial basis, to ensure POWERGRID s profitability and liquidity. 2. At appraisal, the Project comprised the (i) construction of kilovolt (kv) transmission lines comprising 675 circuit kilometers (cct km) and substation extensions in Assam, Mizoram, and Tripura in the northeastern region; (ii) construction of 195 cct km of 132 kv transmission lines and substation extensions to evacuate power from the 84 megawatt (MW) Agartala gasfired power plant in Tripura; (iii) construction of a 220 kv transmission line of 85 cct km and a substation extension to evacuate power from the 100 MW extension of the Kopili hydroelectric plant in Assam; (iv) establishment of a modern regional system coordination center (RSCC) for the northeastern region with computerized load dispatch facilities in all seven states in the region; (v) construction of kv transmission lines comprising 890 cct km and substation facilities to evacuate power from the 1,000 MW stage-ii of the Vindhyachal coal-fired thermal power plant; (vi) construction of a 400 kv double circuit transmission line of 550 cct km and substation facilities to interconnect the eastern and southern regions; (vii) construction of 220 kv transmission line of 600 cct km and substation extension to evacuate power from the 420 MW stage-ii of the Unchahar coal-fired thermal power plant; and (vii) consulting services. Subsequently, four grid strengthening schemes in the eastern region were included in the Project to use the cost savings accrued due to favorable market conditions and depreciation of the Indian rupee against dollar. The schemes comprised: (i) grid strengthening for north Bengal consisting of a loop-in loop-out (LILO) of the first circuit of 400 kv Bongaigaon Malda line at Siliguri substation; (ii) grid strengthening for north Bihar consisting of LILO of the second circuit of 400 kv Bongaigaon Malda double circuit line at Purnea substation; (iii) grid strengthening for West Bengal consisting of 400 kv bays at Farakka and Malda, including installation of an inter connecting transformer (ICT) at Malda substation; and (iv) grid strengthening for Orissa with installation of a new ICT at Jeypore substation. 3. At appraisal, India had an installed power generation capacity of 81,174 MW. Power shortages, poor quality of supply with significant voltage fluctuations, and frequent load shedding in most parts of the country undermined industrial competitiveness and posed severe constraints on economic development. Demand for electricity at the end of the 11 th five-year plan in 2012 was estimated at 975 billion KWh which required an installed capacity of about 200,000 MW with matching augmentation of transmission and distribution facilities. Financing these capacity expansions was a major challenge for state electricity boards (SEBs) reeling under heavy debts arising from inadequate tariffs, payment defaults by consumers, and huge transmission and distribution losses. 4. The power system in India is organized into five electrical regions: northern, northeastern, eastern, western, and southern. Each electrical region attempts to connect and

17 2 synchronize power systems of neighboring states within the region, but interregional transmission capacity is limited. This means some regions with surplus installed capacity are unable to export power to regions in deficit. Further, in India the investment ratio for generation and transmission, including distribution, is about 70:30, against the recommended ratio of 50:50. This has limited the scope for interregional and intraregional power transfer capabilities and inhibited (i) optimum utilization of existing installed generation capacities, and (ii) development of mega-power plants. Before the establishment of POWERGRID in October 1989, the National Thermal Power Corporation (NTPC) and the National Hydro Power Corporation (NHPC) constructed and operated the transmission facilities that evacuated power from their power plants and transmitted it to client SEBs. As the requirements for transmission facilities had grown considerably since the establishment of NTPC and NHPC, the Government of India recognized that it would be more efficient to have a national transmission utility that would (i) be responsible for developing transmission systems to evacuate power from central power sector plants, and (ii) construct and operate transmission facilities to transfer power among SEBs within a region and between regions. 5. New government policies in the 1990s to promote mega-power plants prioritized (i) development of additional transmission capacity to evacuate power from planned power plants, (ii) provision of high-voltage transmission corridors to facilitate interregional power transfers, and (iii) formation of a national grid. To meet these objectives, POWERGRID formulated a detailed long-term transmission development plan in From FY1996 to FY2000, the capital requirements of this Plan were estimated at about $4.2 billion. To meet part of these requirements, ADB agreed to finance the Project through a transmission sector loan. 6. A $275 million ADB loan was approved in November Under the original financing plan, ADB was to finance $275 million (52.1%) of the total cost of the Project, and the balance of $252.4 million equivalent was to be financed by POWERGRID from its own resources and domestic borrowings. The total project cost at appraisal was $527.4 million with a foreign exchange cost of $300.8 million. In 1998, additional subprojects were included with the approval of ADB. According to the revised cost estimates, ADB was to finance $275 million (46%) of the revised estimated cost of the Project, and the balance was to be financed by POWERGRID ($ million). The project components funded under the loan included (i) substation equipment; (ii) transmission line towers, aluminum conductors, and insulators; (iii) all equipment and services for the regional system coordination center; and (iv) consulting services. In addition to the cost of equipment and materials, the loan amount covered 70% of the cost of installation. II. EVALUATION OF DESIGN AND IMPLEMENTATION 7. The main events in project implementation are presented chronologically in Appendix 1. A. Relevance of Design and Formulation 8. Although the total energy production in India has grown from 379 billion kwh with an installed capacity of 81,174 MW at appraisal to 586 billion kwh with an installed capacity of 114,739 MW in 2005, the country is still experiencing a peak power shortage of 12.1% and an energy shortage of 7.2%. It is estimated that demand for electricity will grow to 975 billion kwh in 2012, with an installed capacity of over 200,000 MW. The interregional power transfer capacity of 500 MW in 1995 has grown to 9,500 MW in 2005 and will increase to 30,000 MW by The present interregional power exchange is at its full capacity of 9,500 MW. The Project

18 3 has made a significant contribution to providing a transmission system capable of evacuating more than 1,500 MW from the new generating plants commissioned during 9 th five-year plan period ( ). It has strengthened the northeastern, eastern, and western regions so they can meet increased power demands and facilitated interregional power transfers. At completion the Project was relevant. Since the demand for power is still growing and the energy sources in India are unevenly distributed, bulk power transmission and interregional power exchanges will continue to increase, so the Project will continue to be relevant. The Government has put greater emphasis on development of transmission corridor across the regions that would be capable of providing power exchanges to the extent of 30,000 MW by At appraisal, ADB s country operational strategy for India supported reinforcing and expanding existing transmission and distribution systems relating to existing and new generation, and establishing regional and national grids. ADB s assistance was designed to support POWERGRID s efforts to establish a transmission infrastructure to (i) evacuate power from the new generating plants being constructed at coal pit-heads; (ii) use existing generating capacities efficiently by facilitating interregional power exchanges; (iii) increase the power availability and improve the reliability of the power supply in the northeastern region, which has the lowest per capita power consumption in India; and (iv) strengthen the northeastern, eastern, and western regional grids. ADB support to POWERGRID was also a key element of ADB s strategy to improve power sector efficiency, since the infrastructure provided under the Project has made the utilization of existing generating capacities more efficient, and improved the performance of the northeastern regional grid by establishing the RSCC, which improved the plant load factor of the power plants in northeastern region and reduced grid disturbances. The support to POWERGRID at central and state levels also helped implementation of the availability-based tariff (ABT), improvements to grid discipline in the power sector, and determination of the bulk supply and transmission tariffs on a commercial basis. The subprojects will help POWERGRID to establish and operate a national grid on a real time basis, which will result in efficient utilization of the existing power infrastructure facilities and long-term utilization of energy resources optimally. 10. The Project s components were implemented without any deviations from the designs adopted at appraisal. POWERGRID is able to operate all the components of the Project satisfactorily and the annual availability of transmission system is above 99%. The Project has helped to (i) facilitate the transfer of power from the power-surplus eastern region to the powerdeficit southern region; (ii) improve the plant load factor (PLF) of power stations in the northeastern region, and improve the system reliability and stability of the northeastern regional grid by establishing the RSCC; (iii) optimize existing installed capacities by facilitating interregional power exchanges; and (iv) strengthen the eastern and western regional transmission systems to enable them to meet growing demand. This demonstrates the appropriateness of the project design and rationale. B. Project Outputs 11. At appraisal, it was envisaged that the Project would (i) augment the northeastern transmission system; (ii) establish the RSCC in the northeastern region; (iii) construct a 400 kv transmission system for evacuation of power from Vindhyachal stage II and Unchahar stage II power stations; (iv) establish an interregional link between the eastern and southern regions; and (v) provide consulting services. In 1998, eastern region grid strengthening schemes were included. All the components of the Project have been completed as envisaged. A brief review of the status of the completion of project components follows.

19 4 1. Augmentation of Northeastern Transmission System 12. This subproject comprised construction of (i) 493 cct km of kv lines; (ii) two new substations at Khleihriat and Badarpur; and (iii) bay extensions at six substations, including installation of 20 MVAR reactors at two substations. The subproject was completed in December 1999 and has been operating satisfactorily since then. It was estimated that 120 MW of power could be added by this subproject. Although the new system is able to handle more power, present usage is limited to 100 MW because of constraints on subtransmission and the distribution network of the states. Efficient operation and maintenance by POWERGRID ensured this transmission system was available more than 99% of the time and that the region was able to meet increased demand. The annual energy supply of the seven states in the northeastern region increased from 4,350 million kilowatt hour (million kwh) in FY1998 (before project completion) to 5,345 million kwh in FY2001 (after project completion). The Project has also helped to improve the reliability of the power system in the region, particularly in Assam, Tripura, and Mizoram. It is facilitating export of surplus power from Meghalaya to Tripura and Mizoram and evacuation of imported power from the eastern region to important load centers in northeastern region. 2. Agartala Transmission System 13. This subproject comprised construction of 15 cct km of a 132 kv double circuit line from the 84 MW Agartala gas-based power plant (GBPP) to an existing substation at Agartala and another 132 kv single circuit line of 100 cct km from Agartala GBPP to Kumarghat substation, including the extension of bays at Agartala and Kumarghat substations. The Agartala GBPP Agartala section of the line was completed in April 1998, but the Agartala GBPP Kumarghat section was delayed because of law-and-order problems and was not completed until November POWERGRID was able to ensure that the system was available more than 99% of the time and it has evacuated over 500 million kwh per year since it was commissioned (against the appraisal estimate of 419 million kwh per year). The power evacuation during April November 2004 was 425 million kwh. 3. Kopili Stage-I Extension Transmission System 14. This subproject comprised construction of 76 cct km of a 220 kv single circuit line from Kopili stage-i to Misa and a bay extension at 220 kv side of the 400/220 kv Misa substation. Construction of this line took only 6 months and was completed in July 1998 to coincide with the commissioning of the generating station. Advance procurement action was taken with prior approval of ADB to achieve this important milestone. It was estimated that this line, originally intended to improve the redundancy of the existing Kopili evacuation network, would evacuate 21.9 million kwh per year. The total power evacuation from the Kopili hydroelectric plant has gone up by over 260 million kwh per year since completion of this subproject and the usage of this particular line is much higher than the appraisal estimates. The line acts as a main evacuation system for the generating station, as well as providing redundancy. The total generation at Kopili during April November 2004 was 1,037 million kwh. 4. Northeastern Regional System Coordination Center 15. This subproject comprised construction of (i) a modern power system coordination center for the northeastern region with supervisory control and data acquisition (SCADA) and energy management system (EMS); (ii) computerized load dispatch centers in seven states; and (iii) a dedicated broadband communication system through fiber optic, digital microwave

20 5 and power line carrier communication (PLCC) linking the remote terminal units (RTU) at power stations and substations with the RSCC and state load dispatch centers. The system was completed in May Commissioning the RSCC has enabled (i) coordinated scheduling and economic dispatching, leading to improved plant load factor (PLF) at all generating stations in the region; (ii) avoidance of grid disturbances (there were 61 partial and 5 total grid collapses in and only 8 partial and no total grid collapses in , following the commissioning of the RSCC); (iii) a reduction in the number of line trippings and faster restoration; and (iv) implementation of the ABT regime in northeastern region. The central sector generating stations (of National Hydroelectric Power Corporation Ltd and North Eastern Electric Power Company Ltd) with an installed capacity of 1,235 MW in the northeastern region have increased their energy production from 3,543 million kwh in FY2003 to 5,764 million kwh in FY2005, an increase of 63%. This jump in energy production has been the result of coordinated scheduling and economic dispatching with the help of RSCC. A reliable and dedicated communication system built for the RSCC facilitates real-time coordination with power system control centers of other regions, which has enabled more surplus power to be exported from the northeastern region. 5. Vindhyachal Stage-II Transmission System 16. This subproject comprised construction of: (i) kv lines totaling 1,363 cct km from Vindhyachal and Korba, (ii) bay extensions at Bina and Korba 400 kv substations, and (iii) new 400/220 kv substations at Satna and Raipur. The subproject was completed in October It was estimated that 6,000 million kwh per year would be evacuated from the 1,000 MW Vindhyachal stage-ii power station and that the evacuation system for 1,260 MW stage-i of Vindhyachal thermal power station would be strengthened. The average annual power evacuation through this subproject is in the range of 14,500 million kwh. With the completion of this subproject, the power supply situation in Madhya Pradesh, Gujarat, Maharashtra, and Chathisgarh has improved considerably as the system operates at full capacity with above 99.5% availability. 6. East South Interconnector 17. This subproject comprised construction of 442 cct km of 400 kv double circuit transmission line from Jeypore to Gazuwaka and switchyard extensions at Jeypore and Gazuwaka 400 kv substations. The subproject was completed in March The subproject was intended to facilitate export of 500 MW of power from the eastern region to the southern region with an estimated energy transfer of 3,005 million kwh per year. The power transfer through this interconnector has improved the reliability and efficiency of the power systems of both the regions because of the load diversity and the generation mix differences between two regions. The average annual power transfer from the eastern region to the southern region during the past 5 years is 2,900 million kwh. POWERGRID has already implemented another 500 MW HVDC back-to-back station at Gajuwaka to enhance the power transfer capacity from the eastern region to the southern region, which was commissioned in February The completion of this subproject was timely and has helped to meet part of the increasing power demand in the southern states and improve the utilization of existing generating capacities in the eastern region. 7. Unchahar Stage-II Transmission System 18. This subproject comprised construction of kv double circuit lines from Unchahar power station in Uttar Pradesh to Kanpur, a major load center in the northern region. The

21 6 existing 400 kv POWERGRID substation was expanded to accommodate these four circuits from Unchahar. The original scheme was completed in December1999. However, the two LILOs of existing 220 kv transmission lines to the expanded Kanpur substation, which were included in the Project in 1998, were completed in October 2000 and September This transmission system is evacuating power from the 420 MW coal-fired Unchahar thermal power station to important load centers in the power deficient northern region. The system evacuates 2,400 2,600 million kwh per year against the appraisal estimate of 2,097 million kwh per year. 8. Grid Strengthening Schemes for the Eastern Region 19. This subproject comprised (i) grid strengthening for north Bengal through a LILO of one circuit of 400 kv Bongaigaon Malda double circuit line at Siliguri; (ii) grid strengthening for north Bihar through a LILO of the second circuit of 400 kv Bongaigaon Malda double circuit line at Purnea; (iii) grid strengthening for West Bengal consisting of extension of 400 kv bays at Farakka switchyard and Malda substation and installation of a 315 MVA interconnecting transformer (ICT) at Malda enabling the charging of the existing Farakka Malda line at 400 kv; and (iv) grid strengthening for Orissa with a new ICT of 315 MVA at 400 kv Jeypore substation. These schemes were completed progressively in October The commissioning of these subprojects enabled (i) to serve an additional peak load of 150 MW in north Bengal; (ii) to serve an additional load of 100 MW in north Bihar with 720 million kwh per year of power absorption; (iii) annual power absorption of 650 million kwh in West Bengal; and (iv) annual power absorption of 350 million kwh in Orissa. The 400 kv Bongaigaon Malda line, which was subjected to frequent and prolonged outages, has stabilized after completion of the two LILOs at Siliguri and Purnea, which increased the power exchange capacity and reliability of this important interregional link and also increased the power transfer capacity of the line. 9. Consulting Services 20. Consulting services for the implementation of the RSCC and implementation of the recommendations of the tariff study were included in the scope of the Project, but were used only for the RSCC. Consulting services for bulk supply and transmission tariffs and for a related regulatory framework were not used because the Government had formed special task forces to implement the recommendations of the tariff study, and the Central Electricity Regulatory Commission (CERC) was established in 1998 to develop the regulatory framework. C. Project Costs 21. At appraisal, the total cost of the Project, including additional grid strengthening projects approved in 1998, was $ million equivalent, comprising $ million in foreign currency (57%) and $ million equivalent (43%) in local currency. The ADB loan at appraisal was $275 million, of which only $ million (91.6%) was utilized. Cost savings of $ million equivalent (29.7%) consisted of $86.36 million in foreign currency and $90.85 million equivalent in local currency. Appendix 2 compares estimated with actual project costs. The project costs and summary of contracts are given in Appendix 3. Appendix 4 provides the average exchange rates used to convert local currency to the dollar equivalent. 22. Appendix 5 compares the project financing plan, which initially envisaged a foreign currency expenditure of $275 million from the ADB loan (46% of total project cost), with $25.80 million in foreign currency and $ million equivalent in local currency from the internal resources of POWERGRID, and from domestic borrowings. POWERGRID s share of $25.80 million foreign currency expenditure was not required, since the foreign currency requirements

22 7 of the Project were met from the ADB loan proceeds. Total project expenditure was $ million, comprising $ million in foreign currency from the ADB loan and $ million equivalent in local currency from POWERGRID s funds. ADB s share of financing increased from 46% to 59%, despite a decrease in the loan amount from $ million to $ million. 23. The foreign exchange cost savings of $86.36 million can be attributed to (i) lower-thanestimated costs in equipment procurement due to competitive bidding, (ii) depreciation of the Indian rupee against the US dollar, (iii) a general recession in the power sector market, and (iv) savings in physical and price contingencies. The local currency cost savings of $90.85 million equivalent can be attributed to (i) a depreciation of the Indian rupee against the US dollar, (ii) non-utilization of contingencies, and (iii) savings in interest during construction (IDC). D. Disbursements 24. ADB approved a loan of $275 million from ordinary capital resources on 16 November Disbursements totaled $ million out of the original loan amount of $275 million. $23.02 million was canceled in three stages as loan savings. Initial disbursements under the loan started on 25 October 1996, and the final disbursement was on 9 July 2003 (80 months later). In June 2001, POWERGRID asked ADB to reallocate $12.96 million to IDC and this was approved by ADB in August During the initial stages of the Project, actual disbursement exceeded the annual disbursement projections, as POWERGRID had made advance procurement actions and used the retroactive financing provision under the loan. The projected and actual disbursements are given in Appendix 6. E. Project Schedule 25. The planned project implementation steps of various subprojects are compared with the actual sequences of events in Appendix 7. At appraisal, all the subprojects were estimated to be completed by June As all the subprojects could not be completed before the loan closing date of 31 March 2001, the date was extended to 31 March 2003 and, to enable disbursements under the loan account to be completed, kept open up to 9 July The major milestones in the implementation of subprojects follow. 1. Augmentation of Northeastern Transmission System 26. Advance procurement action, with prior approval of ADB was taken for this subproject and all contract packages were awarded by May 1996 against an appraisal schedule of March However, the components were not completed until December 1999 against the appraisal schedule of September The main reasons for the delay were the consequences of adverse weather conditions, such as heavy floods, landslides, rivers changing course, and inaccessibility of work locations. Construction work on some components was badly affected by the law-and-order situation. Although there was a delay with respect to the schedule, completion of a 132 kv transmission system totaling about 493 cct km in mountainous terrain with substation works at eight locations spread over three states in three working seasons is a major achievement considering that the working season in this region is less than 5 months a year.

23 8 2. Agartala Transmission System 27. The subproject was scheduled for completion by September The Agartala GBPP Agartala section of the line was completed in April 1998, but the Agartala GBPP Kumarghat section was delayed because of law-and-order problems and finally completed in November Kopili Stage-I Extension Transmission System 28. Although the original schedule was June 1997, this subproject was completed in July 1998 to coincide with the commissioning of the generating station. The site work was carried out in 6 months despite serious law-and-order problems in the area. 4. Northeastern Regional System Coordination Center 29. Because of delays in obtaining investment approval from the Government, the contracts were awarded in April 2000, against the appraisal estimate of December The subproject was completed in May 2003, against the original schedule of March This is a major achievement considering that the system involved the laying of 964 km of optic fiber ground wire (OPGW) on transmission lines under live line conditions; setting up 12 digital microwave links; installing 120 PLCC terminals; and installing 67 RTUs at generating stations and substations in seven states. 5. Vindhyachal Stage-II Transmission System 30. Major contracts for this subproject were awarded as scheduled in May 1996 and the system, which involved 1,363 cct km lines and two new substations as well as bay extensions in another two substations, was completed on time for unit synchronization of the generating plant. This subproject was completed in October 1999 against the original schedule of March East South Interconnector 31. This subproject was completed in March 1999 although awarding of the contract was delayed by about 12 months. 7. Unchahar Stage-II Transmission System 32. The schedule of completion for this subproject at appraisal was June 1999 and, despite a delay of more than a year in awarding the contract (because of noncompliance with loan covenants by the utility in Uttar Pradesh), the scheme was completed in December Two additional LILO schemes at Kanpur approved in 1998 were completed in October 2000 and September Grid Strengthening Schemes for Eastern Region 33. Placement of orders for the four grid strengthening schemes was delayed by about a year. The scheme for north Bengal was completed in December 2002 against a schedule of January The implementation of the north Bihar scheme was affected by law-and-order problems and was completed in October 2003 against the schedule of January 2002; the West Bengal scheme was completed in April 2002 against the schedule of March 2001; and the