The Hirakud project aims at utilising the waters of the Mahanadi to irrigate 8 lakh hectares of agricultural land generate 270.2 mw of electricity and develop 561 km long and 3 m deep water way along the borders of Chhattisgarh upto West Bengal at the total cost of Rs. 97 crores. The project involves construction of three dams across Mahanadi at Hirakud, Tikarpara and Naraj. Its execution comprises two stages:
The first stage includes construction of a 61 m high, and 4,801 m long dam (longest dam in the world) across Mahanadi at Hirakud (about 14 km upstream of Sambalpur) which is flanked on both sides by 21 km of dykes and impounds 8,100 m. cu. m of water (spreading over an area of 630 sq. km).
The dam was completed in 1957. (b) Laying down of 147 km long main canals (Sambalpur canal 19 km, the Bargarh canal 88 km, and the Sasan canal (23 km) and 740 km long distributaries which together irrigate about 2.5 lakh hectares of agricultural land in Sambalpur, Cuttack and Bolangir districts of Orissa. (c) Mahanadi delta irrigation scheme which consists of a diversion weir at Mundali and irrigates 3.96 lakh hectares (6.51 lakh hectares when fully completed), (d) Construction of 117 km long navigation channel from Dholpur to Cuttack to provide nagation faciltiy through shallow-draft power-craft.
The second stage of the project comprises the construction of a 1,271 m long dam and a power house with 16 generating units of 125 mw each at Tikarpara. Besides three generating units of 24 mw each at the power house at Chiplima about 25 km downstream of Hirakud and two units of 37.5 mw each at the Hirakud power house have also been commissioned in this stage. The third dam has been built at Naraj, a few kilometers west of Cuttack.
The Hirakud project has a total potentiality to irrigate about one million hectares of land, generate 270 mw of electricity and provide navigation facilities. This electricity is supplied to the Indian Aluminium Co. at Hirakud, the ferro-manganese factory at Joda, the Cement Works at Rajgangpur, the Orient Paper mill at Brijrajnagar, the steel factory at Rourkela and numerous other industries in the districts of Cuttack, Puri, Sambalpur, Dhenkanal, Sundergarh, Keonjhar, Mayurbhanj, Balasore and Bolangir. The reservoir is being utilised for aquaculture, boating and swimming etc. The forestation work undertaken during the project is helpful in soil conservation.
The Hirakud project, according to recent study, has increased the frequency of floods (from 11.8 years in 1956 to 3.75 years in 1988) and droughts in the region. Due to increasing siltation the storage capacity of the reservoir has been reduced from 8,105 cubic km to 6,427 cubic km in recent years.