India (OutlookIndia.com) - Initially, the 21 families in Tanir Bavi, a hamlet situated on the banks of Gurrupur river in Mangalore, thought the idea of a floating power plant--which could be towed along the coast or the river bank--was spooky. So, while negotiating the sale of the 32 acres owned by them to the GMR group which proposed the idea, the frightened locals insisted that GMR reconstruct their dilapidated 'bhoot' temple to save them from evil spirits. Only then did they agree to India's only, and the world's largest, barge-mounted power unit, which was built by GMR's group firm, Tanir Bavi Power Co (TBPC).

"They taught us a classic lesson in doing business in India: not even a large infrastructure project can escape the religious whims of the locals," says M.V. Subba Rao, director, GMR Energy, TBPC's promoter company. The group paid Rs 56 lakh as compensation--including Rs 90,000 per acre for the land--to the affected families and the state government resettled them to an alternate site. Later, he learnt his second lesson—that resettlement doesn't always work. "Most families are back in Tanir Bavi and many of them are employed with TBPC," claims Rao.

But there were tougher-to-swallow lessons in store for Rao. The most crucial one: even if you have a great and unique plan, the life of an infrastructure project in India is full of unexpected upheavals. It can die an unnatural death in the early stages. Even if it takes off after the initial travails, it can become unviable due to changes in the government's mindset, or unforeseen external events. Then, all of a sudden, the logic behind the idea becomes invalid. It happened in the case of TBPC: commissioned with much fanfare in June 2001, it now lies powerless.

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Posted by rjorr at July 23, 2006 2:20 PM