Gujarat awaits mega project approval, Centre bides time

Gujarat awaits mega project approval, Centre bides time

New Delhi/Ahmedabad: Asecond 4,000MW power project to be set up in Gujarat is getting delayed as the Congress-led United Progressive Alliance (UPA) government at the Centre drags its feet on approvals, ahead of assembly elections in a state ruled by the Congress-rival Bharatiya Janata Party (BJP).

The proposed so-called “ultra mega power project", to run on imported coal, near Bhavnagar has been approved in-principle by the Central Electricity Authority (CEA), the nodal agency for site selection for such projects, said a senior government official, but a formal communication of the clearance has not yet been sent to the power ministry.

“We have been asked to go slow about the second project to be put up near Bhavnagar till the Gujarat elections are over," said this official who did not want to be named. “We will consider the site only after the elections."

He declined to elaborate. Union power minister Sushil Kumar Shinde said: “We have not received any proposal so far for the project from the authorities concerned." Gujarat is home to the Mundra ultra mega power project, one of the two such big ticket electricity generating stations that have been approved in the country. The state, whose chief minister is BJP’s Narendra Modi, is among the most industrialized in the country, hosting mega projects such as the Jamnagar refinery of Reliance Industries Ltd, India’s biggest private company, and a multitude of chemicals and pharmaceuticals firms, as also ports and oil terminals.

A Gujarat minister said his government had approached New Delhi for one more ultra mega power project in the state keeping in mind the economic growth rate there and expected demand for electricity. “We had held a series of meetings with the Central government authorities in this regard and they appeared very keen on the project. We were expecting the announcement of the project very soon," said Saurabh Patel, minister of state for energy and petrochemicals. “But, if Congress has asked the (Central) government to go slow even informally, it shows they are scared as it would be one more feather in Modi’s cap."

Some pre-election surveys indicate Modi’s party would retain power if elections were held now.

The ultra mega power projects were an attempt by the government to increase power generation capacity and attract private firms to the business in a nation where regulations and market conditions have traditionally hindered both.

“Both Western and Northern regions are heavily deficient in power. That gap needs to be filled or it will affect the Indian economy," said Hitul Gutka, an analyst at Mumbai-based India Infoline Ltd. “Keeping the macro perspective in mind, the project should be set up and no one should put a spanner in the works." India is widely expected to miss the target of adding 78,577MW of power generation capacity by 2012 to its current installed capacity of 135,000MW.

Several ultra mega power projects have had their share of problems so far. Those at Mundra and Sasan in Madhya Pradesh have been awarded to Tata Power Co. Ltd and Reliance Power Ltd, respectively, and the ones at Tilaiya in Jharkhand, Krishnapattnam in Andhra Pradesh, Tamil Nadu’s Cheyyur and Orissa’s Jharsuguda are on track. Three other such proposed power stations at Girye in Maharashtra, Karnataka’s Tadri, and Akaltara in Chhattisgarh are facing several problems and are widely expected to be axed.

Bhavnagar in Gujarat and Dighe, a coastal town in Maharashtra, were being considered as the new sites in place of Tadri and Girye. “The CEA is examining both these sites. These are coastal projects and the sites offered by the respective state governments are very good sites," a senior Union power ministry official had earlier said, requesting anonymity.