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Land red flag for power plant

Patna, Aug. 7: The 1,320MW thermal power project at Chausa in Buxar has got delayed due to problems in land acquisition stemming from the revised law that guarantees a higher compensation structure.

This has forced SJVN Ltd, a mini-ratna public sector undertaking under the Union power ministry entrusted with the job of building the plant, to revise its project cost and the tariff rate at which it would supply 85 per cent of the electricity generated.

According to the memorandum of understanding signed in January 2013, SJVN Thermal Private Ltd (STPL), a wholly owned subsidiary of SJVN Ltd, is supposed to set up two units of 660MW thermal power plants based on supercritical technology.

The project is being developed by Bihar Power Infrastructure Company, a joint venture of the Bihar government, Bihar State Power (Holding) Company Ltd and IL&FS. STPL was given five years to execute the project.

But SVJN today said hurdles in the way of land acquisition had forced a delay.

“Unless and until complete land acquisition of 1048.69 acres of private land for the project is completed, we cannot carry out any physical activity on the land,” SJVN Limited chairman-cum-managing director R.P. Singh told reporters in Patna.

He, however, expressed hope that the company would be able get the land by the end of this year. “If we get the land by the end of this year, you will see steam coming out of its first unit by the end of the 2018-19 financial year,” Singh said.

The project was to have been completed by the end of 2017.

Land has been the main reason for the delay in executing existing projects.

There were hiccups in the acquisition of 2,832 acres of land for setting up the power plant at Nabinagar in Aurangabad district as well. Then chief minister Nitish Kumar had laid the foundation stone on January 28, 2012, for the ambitious 1,980MW project at Nabinagar, but actual work could start only a year later, in February 2013. Nitish had to engage himself in clinching the deal with the agitating farmers.

SVJN’s Singh explained the reason for the delay in getting land acquired for the Chausa project.

“We had already paid 80 per cent of the amount towards compensation for 501.9 acres of land out of the total of 1048.69 acres. But now the payment will have to be made to farmers as per the new land acquisition act, which became applicable from January 2014. We are ready to pay compensation under the new act. Our officials as well as those of the state government are working on it.”

Singh said there has been an upward revision of the project cost, from Rs 6,791 crore in 2008 to Rs 9,551 crore in May 2014.

He admitted that the increase in the project cost (by Rs 2,760 crore) has led to a hike in the tariff rate. Under the power purchase agreement, SJVN was supposed to supply 85 per cent (1,122MW) of power to Bihar at the rate of Rs 2.55 per unit. In view of the revised project cost, the new tariff rate would be Rs 3.47 per unit.

Land isn’t the only hurdle. The project, except getting clearance from the Central Water Commission (CWC) for using 56 cusecs of Ganga water, is yet to get environmental nod or approval of the Public Investment Board (PIB) for carrying out pre-construction activities.

PIB has been established to examine the investment plans of Rs 100 crore and above put forward by public sector undertakings.

The Chausa project has got the Deocha Pachami coal block (2,012 million tonnes) located in Birbhum district of Bengal. The plant would get 162 million tonnes of coal but it would take six to eight years to develop the block, said R.K. Agarwal, the executive director of SJVN.

CMD Singh, however, said SJVN would apply for tapering coal linkage (temporary coal linkage) besides using up to 30 per cent of imported coal. Tapering coal linkage is given for a few years till the coal block is developed and starts supplying to the plant.