Coal allocation rider halts work on Chhattisgarh power plant

State cancels MoU with L&T; to scout new project partner

The proposed thermal power plant of the Karnataka Power Corporation Limited (KPCL) at Godhna, Chhattisgarh, has remained a non-starter.

Scheduled to start last year, two units of 800 MW each under the first phase of the power project are facing rough weather as the KPCL has recently ‘disassociated’ itself from its project partner Larsen and Tubro (L&T) following the conditions imposed by the Centre towards receiving coal allocation.

“With the Union Government setting a condition that it cannot not give us coal allocation if we join hands with private firms, we had to dissociate ourselves from L&T,”confirmed, KPCL managing director, M R Kamble.

The Memorandum of Understanding (MoU) between L&T and the KPCL/State government was signed amid much fanfare in February 2010 when B S Yeddyurappa was the chief minister.

With the KPCL disassociating itself from the MoU and L&T, the implementation of the project now faces an uphill task. It is said that due to the urgent requirement of coal allocation for the project, the KPCL took the onus to cancel the MoU and adhere to the Centre’s conditions. “We will now have to sign an MoU with a Central Government undertaking for the project,” said Kamble.

Captive coal mine

Last  month, the KPCL bagged a captive coal mine to utilise the fuel for powering its thermal projects. The mine, located in West Bengal, was proposed to provide the coal link to most of KPCL’s power plants located in North Karnataka, including Bellary Thermal Power Station (BTPS) Unit III, Yadlapur and Yermarus power stations in Raichur district. It is said that the same captive mine will now provide coal supply to the Chhattisgarh power project.

Once the Coal Ministry approves the coal linkage, the KPCL will decide to sign an MoU with one of the major Central government undertakings for starting the Chhattisgarh project.

Environment clearance

The KPCL is hoping that after the entire ‘rigmarole’ of once again signing an MoU with a Central Government agency, the Ministry of Environment and Forests (MoEF) will give its nod for firing up its power plant.

“The MoEF can only give its approval only after the coal link is given to the power plant,” reiterated Kamble.

The Godhna power plant was cleared by the State government in 2009 and the land acquisition for the project is stated to have been completed by the government of Chhattisgarh.

The power project is scheduled to provide 1600 MW in the first phase and another 800 MW in the second phase. The total extent of land acquired for the project is 1,016.23 acres and the expenditure incurred till March 2013 by the State government towards setting up the project is Rs 212.07 crore.