Private hydel power projects in Uttarakhand facing a shutdown due to floods are worried over the fact whether they would be able to recover their losses from insurance companies.
The losses incurred is the outcome of the deposition of debris and boulders upstream without any major physical damage to the dam structure itself. However, according to underwriters their liability would be limited to actual physical loss to the structure and loss of profits arising out of the physical loss.
The hydel power companies that have been affected by the Uttarakhand floods include Jaiprakash Power Ventures, Lanco Infratech and GVK. Last month, Jaiprakash Power Ventures informed BSE that it was forced to shut down barrage operations at Vishnuprayag following the
Uttarakhand floods. Similarly, Lanco Infratech, which had its project on the Mandakini river, was also affected because of the floods.
Insurers say that the informal estimates provided by the company of their losses run into hundreds of crores. “In most of the cases, the structure of the dam is intact. The loss is because of millions of tonnes of debris and boulders being deposited upstream which has made the dams nonoperational. Loss of profit cover kicks in only if business is interrupted due to a physical loss to property that is covered under the main policy,” said an industry official.
