**[investwise]** NHPC-Sell; Unlikely To Produce Even A Single MW of Hydel Power From North East

 

NHPC-Can It Produce Power Without Water? China's diversion of Brahmaputra waters towards the Gobi desert and the Yellow River will not only destroy the fledgeling hope of NHPC to produce hydel power from the Subansiri, but lead to desertification of large parts of Assam and Bangladesh.   China's confession that it is building a dam on the Brahmaputra, after denying this for long, is only a half-truth. Many believe that it is part of a much bigger plan for diversion of Brahmaputra waters to China's water-starved areas, including the Gobi desert, which is believed to be expanding by 3 km per year.   Besides, Beijing's claim that a "small project" at Zangmu in Tibet on river Brahmaputra (called Tsang Po in China) will not impact water flow to India does not sound credible. Going by media reports, this project itself is only the first of a series of at least four other dams proposed to be built by China on the same river system.   China is already known to have given the contract for the implementation of this project to one of its largest engineering and construction companies, and that fact is now in the public domain. That, in fact, may have been the reason for China to admit some activity on the river.   What should indeed worry New Delhi is not this project alone but China's ultimate designs on diversion of Brahmaputra waters. There have been reports that China has drawn up an ambitious, even if technically challenging, plan for constructing "Western Canal" for this purpose which may be in place by 2050. Moreover, the reports also speak of a plan to carry Brahmaputra waters to the dying Yellow River to augment water supplies to Shaanxi, Hebel, Beijing and Tianjin.   It is not clear how seriously the Indian government is taking up this issue with the Chinese authorities. If China goes ahead with its water plans, it will spell disaster for the ecology and hydrology of vast areas in the Indian north-east as well as Bangladesh, where a sizable chunk of population rely critically on Brahmaputra waters for survival and livelihood.   The danger appears real because China has the technical competence, manpower as well as fiscal resources to carry out such grandiose projects.   At stake is also the prospect of harnessing the hydro-power potential of this mighty river and its tributaries like Siang, Subansiri and Lohit which is reckoned at around 50,000 Mw in the north-eastern states. Part of this potential, around 2,000 Mw, is already under development with contracts having been awarded to different firms. Any indication of paucity of water in this river system will worry investors and stakeholders.   India does not have any formal river water sharing treaty with China, but that does not undermine its legitimate claim over Brahmaputra waters as a lower riparian. India and China have an expert-level mechanism to address water issues. But that forum may not be adequate in addressing what could become a major diplomatic and political issue.   Since Bangladesh is also an interested party, the matter could well be discussed trilaterally. India's water diplomacy must be more sophisticated than it has been so far, and must have a holistic framework, since India is both an upper riparian and a lower riparian state in the region.   Indeed, India can boost its credibility and credentials with all neighbours by drawing attention to the fact that as an upper and lower riparian, it knows the needs and appreciates the concerns of both. Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.   Nothing in this article is, or should be construed as, investment advice.

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