PHPA I & II Managing Director R.N Khazanchi

PHPA I & II MD to finish contract by March 2018 and PHPA II to get separate MD

In what will be a major change in the top management of the Punatsangchu Hydroelectric Project Authority (PHPA) I and II the 1020 MW PHPA II is expected to soon get a separate MD that will look after P II exclusively.

In another major development the current MD of P I and II projects R.N Khazanchi will be finishing his contract by March 2018. Given that the current MD will be turning 76 by 4th December 2017, well past most retirement ages, he is not expected to get any further extension beyond the end of his contract.

It has been understood that it was the Bhutanese side that wanted a separate MD for PHPA II, and the Indian side, which is the other bilateral partner on implementing the project, also agreed. A vacancy was put up around 11th August 2017 on the Indian Ministry of Power website giving 31st August as the last day of submission. The final rounds of the selection process are currently going on.

The main concern for wanting a separate MD for P II is that it would be difficult for one MD to fully ‘cover’ both the mega projects.

PHPA I and II in essence are separate organizations with separate engineers, administration, staff etc but in 2010 the current MD was given additional charge of PHPA II as well. As a result even key management staff like Joint Managing Director, Director Technical and Director Finance were the same for both projects.

From 2016 April a separate Director Technical was appointed for PHPA II and now there will soon be a separate MD for PHPA II.

On the other hand the younger MD of Mangdechu Hydroelectric Project Authority (MHPA), A.K Mishra whose contract ends in December 2017 has been given one year’s extension so that the project can be completed and commissioned by next year.

The MHPA project has progressed relatively smoothly both in terms of the time line and also avoided any excessive additional costs beyond the projected costs.

The P I and II projects have been beset by major problems from the start, and ironically it was in those exact areas where plans had been changed to bring about more efficiency.

The P I project began its preliminary works in 2008 when Khazanchi who was the then Tala project MD was given P I as an additional charge. He took over full charge of P I in 2009.

In June 2008 the PHPA presented to the then cabinet an alternate plan of shifting the dam site 1.4 km upstream of the original location in order to produce an additional 105 MW power at an additional Nu 1.2 bn on the then 2008 project cost of 35.14 bn.

The then cabinet agreed to the plan. However, the new location had a 74 meter depth below the river bed pushing up the dam cost and it also had a sliding right bank right where the dam was supposed to be.

A joint audit report by the Royal Audit Authority and Comptroller General Audit of India from the April 2012 to March 2013 period pointed out that a geo technical appraisal report prepared by the Geological Survey of India (GSI) had identified some weak geological features at the dam site which was deliberated by officials from GSI, Central Water Commission (CWC) and WAPCOS on 10th February 2009. The report pointed out that this may entail additional cost.

The GSI report also said that additional investigations were required for the exact delineation of the weak geological features.

However, instead of conducting further investigations the main consultant WAPCOS, on behalf of GSI, issued a clearance for the project dam bids to be opened on 16th February 2009.Finally work was awarded to the dam contractor Larsen and Toubro on 27th March 2009. It was also WAPCOS that was the main consultant for both P I and P II projects. WAPCOS is an Indian Public Sector consultancy company.

Despite some strengthening works major slides started happening from July 2013 onwards leading to an additional Nu 3.5 bn bill to strengthen the right bank which still continued to slide. The  P I project as per the latest rectification works recommended by a third party expert in the form of the Norwegian Geological Institute will need to spend up to Nu 1 bn for additional rectification measures on the right bank.

However, the main impact of the slide has been in delaying the entire 1200 MW P I project. The original Nu 35.14 bn and expected completion period of November 2016 in a series of escalatory steps jumped to Nu 93.75 bn with the latest timeline going up to 2022.

By comparison the 720 MW Mangdechu project which had a Nu 28.9 bn cost in 2008 is expected to shoot up to only Nu 46.72 bn by completion next year. Mangdechu has also been delayed as it was supposed to be commissioned by September 2017 but the delays are expected to be only till mid 2018.

In the case of P II project a major decision taken by the PHPA which was also approved was to remove the above ground powerhouse and make it underground. However, this decision also seems to have back fired due to the huge cavern collapse which is expected to cost up to Nu 1.5 bn for rectification measures as per the NGI’s expert opinion.

The P II project was supposed to be complete by 2017 but latest estimates would push it to around 2020. The original price of around Nu 37.7 bn is now Nu 72.90 bn.

R.N Khazanchi

The name Khazanchi has become synonymous with hydropower development in Bhutan, and especially for the successful completion of the 1020 MW Tala project which will finish its last loan installment by next year and is Bhutan’s main revenue generator.

According to people who have worked under him it was the many changes that Khazanchi made from the original Tala DPR that allowed the notoriously difficult Tala project to be completed in time.

Former colleagues site several key decisions made by Khazanchi that were very crucial for the completion of the Tala project especially in an area ripe with geological surprises.

It was Khazanchi’s expertise and good work in the difficult Tala project that led to his appointment for both P I and P II.

However, the two major decisions by the PHPA on dam relocation of P I and moving to an underground powerhouse in P II backfired.

However, here again hydro experts argue that it is not fair to put these on PHPA alone as the DPR was actually done by WAPCOS for both projects and so such issues should have also been identified in the DPR by WAPCOS. There were also several other expert Indian agencies involved in the whole process.

There is also the issue of the ever present ‘geological surprises’ in a relatively young mountain range.

Khazanchi joined Tala as its head in 1997 and this year he would be completing 20 years in the hydropower sector in Bhutan. He started his career as an assistant engineer in his home state of Jammu and Kashmir in the hydel wing of the PWD. He joined the National Hydropower Corporation of India in 1983 and rose up the ranks until he was selected as the head of the Tala project team in 1997 to build the 1020 MW Tala project.

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