BackUSE wants to move Nayachar power project to new site
USE wants to move Nayachar power project to new site
PremiumFacing delays: Prasoon Mukherjee, chairman of Universal Success Enterprises Ltd. Indranil Bhoumik/ Mint
Kolkata: Universal Success Enterprises Ltd (USE), the former partner of Indonesia’s Salim Group for now-aborted projects in West Bengal, has written to the state government saying it wished to move its proposed power plant from Nayachar island in East Midnapore district to a new site for quicker implementation.
The reason it cited for putting the Nayachar project on hold, which now appears to be a “jinxed island", according to USE chairman Prasoon Mukherjee, is difficulty in obtaining clearances from the Central environment authorities.
USE wants around 700 acres in Purulia district for its proposed power plant, according to Partha Chatterjee, West Bengal’s commerce and industries minister. The state government has agreed to allot land in a vacant industrial park owned by its arm West Bengal Industrial Development Corp. Ltd to allow USE to immediately start construction, he said.
It takes years for power plants to obtain clearances from the environment authorities, particularly if proposed to be set up in coastal areas, said Mukherjee, adding that if the state government allots land elsewhere to expedite the project, “USE will be happy to move it to a new site".
Mukherjee claimed it resulted in cost escalation, estimated for him by Jurong Consultants at $2 billion, and asked the state government to compensate USE by allotting land for commercial development elsewhere in the state.
USE has interest in real estate development as well—it is the partner of competing construction companies Unitech Ltd and DLF Ltd for projects in West Bengal. USE got into a similar arrangement recently with the Shapoorji Pallonji group to jointly pursue various projects in the state.
West Bengal, however, refused to allot more land to USE to compensate for cost escalation. Eventually, Mukherjee fell out with the state administration—the erstwhile Left Front government towards the end of its term last year took legal steps to terminate its agreement with USE.
The agreement, however, survived the change of political guard—the project, though, changed in accordance with the wish of Mamata Banerjee, West Bengal’s chief minister. Instead of a chemical hub, USE agreed to build a power plant and an eco-tourism hub at Nayachar.
Former West Bengal chief minister Buddhadeb Bhattacharjee had offered to turn Nayachar into an exclusive enclave for Japanese expats working in the state in a bid to attract investments from their country, but that, too, didn’t materialize.
Meanwhile, a revised agreement for USE’s proposed projects at Nayachar was signed earlier this year, but the state government didn’t make it public. It envisages viability gap funding by way of allotment of land at concessional rates elsewhere in the state, according to government officials, who did not wish to be named.
Following the revised agreement, the state government has allotted 97 acres to USE at Baruipur in South 24 Parganas district, they said, adding that it isn’t immediately clear whether the state government will seek to modify the agreement again if the power plant is moved to Purulia. Under the revised agreement currently in force, USE is to receive around 250 acres more, according to state government officials.
Chatterjee said the proposed power plant at Nayachar is not being shelved—USE will continue to pursue it, but because it is taking time to obtain clearances for it, the company is being offered another site for building a power plant immediately, he added. So, for now, Mukherjee gets to keep the land earmarked for the power plant Nayachar as well.
Mukherjee said that he has tied up coal for the project; finance, too, has been committed by potential lenders. However, he admitted that he was no longer seeking equity investors for the project immediately.
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