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UP Plans for Power Project in JV with Neyveli Corp hit roadblock

 

Vibha
Lucknow October , 2009
UP government is negotiating with the Neyveli Lignite Corporation Ltd, (NLC) , Tamilnadu based mini ratna central PSU, for setting up 660X3 or 1,980 MW coal based thermal power plant in the state.
An official of the UP Power Corporation said a joint venture is proposed to be set up with 50:50 participation of the NLC and UP government.  The NLC has identified two sites for the proposed power plant and the logistics are being evaluated. The government has given in principal approval for allotment of 2,500 acres of land and 800 cusec of water for the power project.
The official however said `` though the government has given in principal approval there were several issues that remained to be sorted out’’.
AR Ansari, chairman of the NLC had recently visited the state capital and held consultation with the officials of the UP Power Corporation Ltd and UP thermal power generation Corporation Ltd.
Earlier the NLC suggested Fatehpur, falling on the Delhi –Kolkatta rail trunk route as the proposed site for the project. Later they said the Union coal minister Shree Prakash Jaisawal wanted the project to be shifted to Kanpur. Jaisawal is MP from Kanpur.
``UP government has no reservations over the location of the project whether it is in Kanpur or Fatehpur, if  NLC has some other ideas then the state government would  move ahead for setting up the project under PPP model’’, said an official of the UPPCL.
However UP government has serious reservations over the latest proposal of the NLC of hiking its equity in joint venture to 51 percent. ``This is not acceptable to us since in that case the JV would become a Central PSU and UP’ share of power generated from the proposed project would be only 40 percent, while the share of the state will be as high as 90 percent if the JV has equal partnership of 50:50 between the UP government and the NLC’’, said an official of the UPPCL.
``We will soon put up this issue before the energy task force headed by the state’s chief secretary whether to set up the project under a JV with equal partnership or allowing majority share to NLC in the joint venture’’, said Navneet Sehgal, CMD of the UPPCL, adding ``The Memorandum of understanding (MOU) proposed to signed soon with the NLC, the document is pending with the law department for approval’’.
UP faced with huge gap between the demand and availability of power is desperate to add fresh capacity during the current 11 th  five year plan. The present installed capacity of the UP Thermal Power Generation Corporation Ltd is just 4,022 MW, while the actual generation hovers between 2,600 to 2,900 MW. The restricted demand for power in UP, is over 10,000 MW. The gap is filled by imposing power cuts and import of over 3,500 to 4,000 MW from the Central sector power plants and import from other states.
UP government in September had floated tenders for the selection of the consultant for studying the feasibility of setting up five thermal power plants in different locations in the state with total installed capacity of 9,840 MW.
Besides the above, power projects with total installed capacity of 8,940 MW are also at the in various stages of consideration. If the capacity of the projects announced and the old projects is added then UP will add as much as 18,780 MW within the current five year plan.
 
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