By Vishal Gulati
Shimla, Aug 7 (IANS): Facing local protests on environmental issues and the World Bank's refusal to provide $650 million, hydropower major Sutlej Jal Vidyut Nigam Ltd (SJVNL) has dropped plans for a disputed 38-km-long tunnel for its 610 MW project on the Sutlej river in Himachal Pradesh, an official said.

The public sector company has now decided on a reservoir-based project that is expected to cost $1,150 million.

Documents accessed by IANS indicate that the company on July 27 submitted an application to the Ministry of Environment and Forests for the project's fresh terms of reference, the first step towards acquiring green clearances. In the revised design, SJVNL, work on whose maiden hydro project in this hill state started in 2004-05, has decided to create three reservoirs that will supply water to the turbines, rather than feeding it through a tunnel, an official said.

The environmental groups and affected people, under the banner of the Sutlej Bachao Jan Sangharsh Samiti, a group of representatives of villages to be affected in Kullu, Mandi and Shimla districts, have expressed the victory of their campaign to save the original course of the Sutlej with the dropping of tunnel plan.

"The tunnel, if built, would have been one of the longest for a hydro project in Asia and would have led to the disappearance of the Satluj for a stretch of 50 km," Shyam Singh Chauhan, a resident of the affected area, told IANS.

Besides, nearly 78 villages would have been affected with the tunnelling work, he added.

The locals have been agitating against the project since its inception and have also challenged the environment clearance granted earlier to the company by the union ministry of environment at the National Green Tribunal.

The World Bank last April turned down a SJVNL request for a $650 million loan for the project owing to protests against the tunnel.