Bengaluru: What activists, environmentalists and members of various political parties could not do in over two decades, nature’s fury accomplished in a little over 10 minutes.

The 60-metre high concrete faced rock-fill dam of the 1,200 MW Teesta Stage III hydropower project in Chungthang, North Sikkim, was breached; the power house was submerged and the bridge connecting the power house washed away by a glacial lake outburst flood (GLOF) around midnight on October 4. A GLOF is a sudden release of water from a glacier-fed lake.

The theory that a cloudburst over South Lhonak Lake triggered the GLOF seems unlikely judging by the rainfall reported in Sikkim in the 24-hour period ending at 8.30 a.m. on October 4, 2023, as reported by the India Meteorological Department, which shows that it was East and South Sikkim that had high rainfall, and not the North Sikkim (Mangan) district.

The Lhonak lake GLOF-induced flash flood was compounded by the dam’s own full water load of about five million cubic metres. It is likely that the spillway tunnels were not adequate to handle such huge volumes of water.

“The spillway for the Teesta III project was designed to handle a maximum flood of 7,000 cusecs (cubic metres per second), which is a conservative estimate that accounts only for probable maximum flood due to rainfall events, but is not designed to handle a GLOF,” Himanshu Thakkar of the South Asia Network on Dams, Rivers and People (SANDRP) has opined.

Official estimates by the Sikkim State Disaster Management Authority put the toll at 42 deaths as on November 1, the latest available, and 77 people are reported missing. However, media reports put the toll at 82. The state-run National Hydroelectric Power Corporation Limited (NHPC) said it estimated losses at around Rs 233.56 crore (about $28 million).

The Sikkim cabinet has constituted a high-powered committee of technical and subject matter experts to investigate the dam breach. It has also asked the vigilance police to investigate possible criminal angles in the project, right from its inception, allotment, share equity transactions and factors relating to dam safety.

We studied reports from the Comptroller and Auditor General (CAG), multiple petitions filed opposing the project, and spoke to experts and activists to explain how the project’s design was changed, how there were irregularities in project allotment, how ownership of the special purpose vehicle established for the project changed, and how the state ended up spending more money and time than planned on the project.

The National Green Tribunal (NGT) has suo motu issued notices to the Sikkim government, Sikkim Urja Limited (formerly Teesta Urja Limited or TUL) that developed and ran the project, and the NHPC. In 2014, when the environmental clearance given to NHPC’s 520 MW Teesta-IV project was challenged, the NHPC submitted an affidavit to the NGT attesting that projects below Chungthang were safe, and this was accepted by the NGT.

Numerous public interest litigations had been filed (see, for instance, the index page of a 2011 petition here) in the last decade in various courts seeking scrapping of the Teesta Stage III near Chungthang in Sikkim. The concerns raised included the environmental impact of the project in a highly seismic and landslide prone zone, apart from illegalities ranging from techno-economic clearance, violating the August 1996 notification in following the 51% equity holding by Sikkim government in the joint venture, to commercial commissioning and allegations of corruption, as we explain below.

In the government reply and affidavit submitted to the High Court of Sikkim in one such public interest litigation (PIL), writ petition number 40 of 2011, the then Sikkim government refuted all allegations of wrongdoing (copy of relevant page here), saying a later law superseded the notifications on ownership structure.

The incident, and the aftermath

A Reuters report dated October 6 said the government was in the process of installing an Early Warning System (EWS) at the South Lhonak Lake. Geoscientist Simon Allen of the University of Zurich, who is involved with the EWS project, said they had planned to add a tripwire sensor that would trigger if the lake was about to burst, giving the authorities and residents a 90-minute advance warning.

Allen is quoted as saying that, due to logistical issues, the Indian government opted for a two-step approach to the installation.

The authorities at Chungthang were informed by the Indo-Tibetan Border Police (ITBP), according to media reports, about the rise in water levels in the South Lhonak Lake in North Sikkim at 10.40 p.m., giving them an hour, till 11.40 p.m., to open the spillway gates of the dam. Electronically operated gates and even hydro-mechanical gates take only a few minutes to open, but despite the warning, the gates were not opened.

According to Sunil Saraogi, executive chairman of Sikkim Urja Limited, a team had after receiving the information of the GLOF from the ITBP rushed to release the dam waters, but they were overtaken by the GLOF flash floods, and thus could not open the spillways and had to scramble to safety.

Meanwhile, glaciologists at the Divecha Centre for Climate Change, Indian Institute of Science (IISc), have warned that the risk has not been fully eliminated. There is a slight reduction in the ice area but almost half the glacier has not de-glaciated yet. There is a lot of water and ice in the South Lhonak Lake which makes it susceptible to more such events.

Sikkim's Forest and Environment Minister, Karma Loday Bhutia, has reportedly taken a stand against the construction of a dam in Chungthang, aligning with the sentiments of most of the town's citizens who oppose any further dam projects following the catastrophic destruction of the Teesta III dam. The people of Chungthang have also registered a first information report against Sikkim Urja Limited alleging lack of dam safety, culpable negligence, leading to loss of lives and damage to property.

This reporter has sent a detailed email questionnaire pertaining to accountability, and alleged irregularities and corruption to the Sikkim chief minister’s office, the chief secretary, secretary of the power department, and to Sikkim Urja Limited. The story will be updated when we receive a response.

Violation of dam safety norms

The 510 MW Teesta Stage-V hydroelectric project by NHPC, located downstream of the Teesta Stage III project, was granted environmental clearance in May 1999 subject to certain conditions being met.

The Ministry of Environment, Forest and Climate Change (MoEFCC) had said that no other project in Sikkim will be considered for environmental clearance till the carrying capacity study of the Teesta River basin is completed. The MoEFCC entrusted the work of determining the carrying capacity of the Teesta basin with respect to hydropower development to the Center for Interdisciplinary Studies of Mountain & Hill Environment (CISMHE) in 2001, and it was completed in 2007. The CAG’s report of 2016 took note of the Union government’s clearances to the Stage III dam in 2006 without waiting for the carrying capacity report.

“The August 2006 environmental clearance granted to the Teesta-III project reflects the poor environment impact assessment (EIA) studies,” Gyatso Lepcha, general secretary of the Affected Citizens of Teesta, an NGO protesting against dams in Sikkim, told IndiaSpend.

“Section 18 (E) in the EIA report does not include any environmental risk assessment. These risks include flash floods, climate change-related risks including glacial recession and GLOFs, increased run-off, and sedimentation. The dam break analysis and disaster management plan were also not included.”

Further, the developer TUL had proposed to reduce the spillways from the originally planned four to two, including the diversion tunnel, which would have further reduced the carrying capacity, minutes of a 2009 meeting of the Expert Appraisal Committee of the river valley and hydroelectric projects show.

In an affidavit submitted to the Central Electricity Regulatory Commission as part of a petition for levelised tariff, Teesta Urja Limited said the original proposal of a concrete gravity dam was changed to a concrete faced rock-fill dam (CFRD) as recommended by the Central Water Commission (CWC). This was done “to save construction cost…despite knowing that rock-filled cannot withstand huge floods” and earthquakes, Chief Minister P.S. Golay alleged, pointing out that Teesta Stage V dam was not damaged as it was a concrete-filled structure.

Further, changes were also needed in the approved spillway design due to “certain geological reasons”, as the design was not techno-economically feasible, the affidavit said. This led to an increase in the length of the diversion tunnel, a change in desilting chamber arrangement, and the centre-line of the turbine being re-fixed, leading to a change in the powerhouse layout in the Tail Race Tunnel, Teesta Urja Limited said, explaining a 780-day delay in construction.

Researchers like Thakkar of SANDRP have pointed out that data on spillway discharge for Teesta III have not been available even many years after it was commissioned. The CWC’s National Register of Large Dams does not even list the Teesta Stage III. The CEA’s compilation of salient features of hydropower projects in India also does not mention the spillway capacity of the project.

Further, the Sikkim government’s disregard for the warnings and the standard operating procedures recommended by various agencies like the early warning systems (EWS) became evident with the failure to adhere to the Dam Safety Act of 2021, Tseen Tashi Bhutia, convenor of the Sikkim Bhutia Lepcha Apex Committee (SIBLAC) told IndiaSpend. The Act mandates the formation of a State Committee to oversee the safety of dams. The Sikkim government formed a state-level dam safety monitoring committee in 2022.

Arbitrary allotment, allegations of corruption

The CAG reports of 2009, and the report of 2015-16, explains in detail the illegalities and arbitrary allotment of hydropower projects in Sikkim.

The Sikkim government had in June 2004 set a target of producing 3,000 MW of additional power by the end of 2012. A cascade of projects on the Teesta--including Teesta Stage I 320 MW, Stage II 480 MW, Stage III 1,200 MW, Stage IV 520 MW, Stage V 510 MW and Stage VI 500 MW--were conceived and sanctioned, with the approval of the CWC and the Central Electricity Authority (CEA).

The state government set up a high-power committee in June 2004 to expedite the development of hydropower projects, the CAG noted in the 2016 report. Four proposals for Teesta III--from Cosmos Electric Power Supply Limited (CEPSL), NHPC, Reliance, and Sutlej Jal Nigam Vidyut Limited (SJVNL)--were received, and the HPC had recommended the proposal of the consortium led by CEPSL proposal twice that year. The cabinet first did not accede to the recommendation in October 2004, and on the second occasion in November 2004, deferred “for reasons not on record”, the CAG noted.

Meanwhile, the Committee drafted a hydro power policy, which the cabinet approved in October 2004. A fresh call for proposals in line with the policy received five proposals--from the NHPC, National Thermal Power Corporation (NTPC), SJVNL, CEPSL and a consortium led by Athena Projects Private Limited, India. Only Athena India’s proposal was found to fulfil all conditions of the hydro power policy. The proposal was recommended by the Committee in February 2005, and approved by the cabinet that same month. The consortium included Andhra Pradesh Power Generating Company (APGENCO), Larsen & Toubro (L&T), Power Trading Corporation of India Limited (PTC) and Infrastructure Leasing & Financial Services group (IL&FS).

Athena India was incorporated only in August 2004--a year before the MoU--the CAG report pointed out, and “had no previous experience in implementation of hydel projects”. The government “allotted the project to a consortium of private developers without verifying the experience of the consortium leader”, the report found.

Athena India’s consortium partners had this expertise, the company had claimed, due to which the HPC recommended it. However, three of the four partners (except PTC) exited the consortium “without the prior permission of the state government”.

Athena India floated a special-purpose vehicle named TUL for the project, which signed the agreement with the state government. Both parties were to contribute to project cost by way of equity contribution in TUL’s capital: Athena India was to contribute 74% and the government, 26%.

“Private developers failed to subscribe to their committed portion of TUL’s equity capital for the second cost overrun of the project,” the CAG report of 2015-16 noted. “As a result, TUL faced financial constraints leading to time and cost overrun in implementation of the project. It was noticed that the cost overrun to the extent of Rs 892.01 crore on account of interest during construction (Rs 758.13 crore) and hard cost (Rs 133.88 crore) was incurred due to financial constraints of TUL.” The government of Sikkim is now the owner of the project, with 60% equity.

Even when Teesta III declared its commercial commissioning in 2017, it did so in an illegal manner, as it did not have the requisite power evacuation and transmission line in place, said Padamjit Singh, chief patron of the All India Power Engineers’ Federation. “This resulted in losses as it could not start operating to its full capacity. Now it has inflicted a huge financial blow to Sikkim.”

The project also allegedly misrepresented facts to obtain carbon credits under the United Nations Framework Convention on Climate Change’s (UNFCCC) clean development mechanism (see here and here).

Further, there were several allegations of corruption associated with the project from activists and politicians. Chief Minister Golay blamed the previous government for building a substandard dam. Former Chief Minister Nar Bahadur Bhandari had alleged corruption in the TUL project and had filed a PIL. Further, Anand Lama, another politician-turned activist, had filed a writ petition alleging corruption in the TUL project. Lama while speaking to IndiaSpend said, “The whole process right from issuing the letter of intent to Teesta Urja Limited to signing of the MOU, and the award of the engineering and procurement contract shows huge corruption and irregularities”. SIBLAC convenor Tseten Tashi Bhutia reiterated his allegations on corruption in TUL project. “I had filed a PIL in the Sikkim High Court, and the Court took suo motu cognisance by admitting the case,” Bhutia told IndiaSpend.

An insurance claim for Rs 11,400 crore (about $1.37 billion) has been filed for the damage to the Teesta III project. However, it is likely to receive only Rs 500 crore because, as per the insurance contract, damages due to GLOF will be entitled only to that amount, and the Sikkim government had paid premiums based on that calculation.

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