NTPC claim to sites could derail TN mega power project plans

NTPC claim to sites could derail TN mega power project plans

New Delhi: The Union government’s plan to accelerate approvals for a second ultra mega power project (UMPP) for Tamil Nadu, ruled by its ally, the Dravida Munnetra Kazhagam (DMK), may come unstuck as NTPC Ltd, the largest power generating company and also a public sector undertaking (PSU), has claimed that the proposed sites under consideration had already been reserved for it.

The government, as reported in Mint on 3 October, is proposing a second coal-based 4,000MW UMPP in TN, even as it dragged its feet on a similar proposal for Gujarat, ruled by the opposition Bharatiya Janata Party.

TN’s two plants were to be located in Cheyyur and Marakkanam.

But in a letter addressed to the power ministry, T. Sankaralingam, chairman and managing director, NTPC, said the Cheyyur site was earlier identified by the PSU for setting up a power project, originally with a capacity of 2,000MW.

“The location for the proposed project with revised configuration of 2,400MW (3X800MW) has been finalized."

The letter then goes on to argue, “It is now understood that a proposal for implementing an ultra mega project at Cheyyur is also under consideration. In view of the above background, efforts made so far, and NTPC’s ambitious growth plan of becoming 75,000MW company by 2017, it is requested that Cheyyur project site may be retained with NTPC."

At present, NTPC has a power generation capacity of 27,404MW, which it plans to increase to 50,000MW by 2012. Of the 22,596MW it plans to add, 15,180MW will be through coal-based power generation, 4,550MW through gas-based generation and the balance from hydropower.

While NTPC has not said so in the letter, it is also staking claim to Marakkanam, the site being considered to locate the second UMPP.

“Both the project sites at Cheyyur and Marakkanam were ours. Though we have done a lot of work on the project, they have been hijacked. We have taken up the issue very seriously. While we had identified Cheyyur around six years back, the site at Marakkanam was identified around six months back. It has now become a political issue. The Cheyyur site is not even suitable for setting up a 4,000MW project," said a senior NTPC executive, who did not wish to be identified.

A senior government official, who asked not to be named, conceded that the sites were originally identified by the PSU and said, “NTPC had also gone ahead with their own studies on the sites. The issue has become very contentious now." He declined to comment further due to the sensitive nature of the issue.

NTPC has so far been unsuccessful in winning a bid to set up the UMPP. A senior power sector expert, who did not wish to be identified, said, “It is unfortunate and is a completely political issue. It is between the power ministry and NTPC to sort it out."

TN stands to benefit if the Central Electricity Authority (CEA) approves Marakkanam as a location for the UMPP because states where such projects are located get preferential treatment when the government allocates power from these plants. However, power generated from the two UMPPs will only be available between 2012 and 2017.

The state has an installed power generation capacity of 10,000MW and plans to raise this to 13,000MW by 2012.

UMPPs have had their fair share of problems. Of the nine proposed projects, only six are on track. While the projects at Mundra in Gujarat and Sasan in Madhya Pradesh have been awarded to Tata Power Co. Ltd and Reliance Power Ltd, respectively, the ones at Tilaiya in Jharkhand, Krishnapattnam in Andhra Pradesh, Cheyyur or Marakkanam in TN, and Jharsuguda in Orissa are expected to be awarded in due course.

The Centre is expected to abandon plans to set up UMPPs at Girye in Maharashtra, Karnataka’s Tadri, and Akaltara in Chhattisgarh for reasons ranging from environmental concerns to differences with the state government.