In what could help the power-starved state get new supplies, Reliance Energy Ltd (REL) and Tata Power Company Ltd are close to settling their protracted dispute over a 3,490-acre plot of land on the Maharashtra coast.
People familiar with the the development who did not wished to be named said the state government has directed the two companies to share the site.
The state government is expected to issue a land acquisition notification shortly. Both Reliance Energy and Tata Power spokespersons confirmed that talks were on to resolve the issue, but declined to elaborate.
If the proposed settlement goes through, Reliance Energy would now have to reduce its original plans to 2,400MW of coal-based generation at the site. This, in turn, will allow Tata Power to develop a 2,000MW imported coal project as well.
Both private power companies had chosen the same piece of land at Shahpur in Raigad district of Maharashtra to set up their new power plants. The dispute had held up the generation of 4,000MW of power in the power-starved western state.
After identifying the plot as a possible location for their new power generation plants, Reliance Energy and Tata Power sought approvals through two different state agencies—Reliance through the state power department and Tata Power through the Maharashtra Industrial Development Corp.
Both companies got the go-ahead from their respective agencies last summer, creating a stalemate.
Both companies then approached Maharashtra chief minister Vilasrao Deshmukh’s office for arbitration.
Mahrahstra is India’s largest power-deficit state with a demand-supply gap of 4,500-5,000MW. The gap is likely to widen further with demand projected to rise every year by 7-10%.
Reliance Energy had originally drawn up plans to develop a multi-fuel 4,000MW power generation complex at Shahpur. The plan was to develop a 2,400MW thermal power and 1,600MW of gas-based power plants. The state government has directed the company to find another location for its 1,600MW gas-based plant.
The Shahpur power plant of Tata Power is expected to receive a share of the coal from the mines of Indonesia’s Bumi Resources’ coal mines in which Tata Power recently acquired a 30% stake.
Tata Power generates 2,300MW of power of which 1,770MW is consumed in Maharashtra. Reliance Energy generates around 800MW of which 500MW is consumed in the state.
According to Tata Power managing director Prasad Menon, the Shahpur site is ideal for a power plant as it is located on the coast without being in an ecologically sensitive zone and offers a sufficiently deep draught for barges with heavy loads to come in.