The Telegraph
Since 1st March, 1999
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Bengal may pick NTPC as Purulia ally

New Delhi, July 20: The Bengal government may dump hydel major NHPC and take on state-owned National Thermal Power Corporation (NTPC) as its partner for the stalled 900-mw Purulia pumped storage project.

The state has informed the power ministry that if National Hydel Power Corporation (NHPC) is unable to resolve the issues that have delayed the start of the project, it could be handed over to NTPC.

The Bengal government has fallen out with NHPC over the price of the power that the project will generate and other niggling issues over which, it feels, NHPC has been dawdling for too long.

A senior power ministry official said, “We have been told by senior Bengal government officials that perhaps it was a wrong decision to join hands with NHPC which has no generation sources in the state. According to him, an arrangement with NTPC, whose Farakka project has a lot of surplus power, would have been ideal.”

"They have indicated to the power ministry that the arrangement with NHPC may have to be terminated immediately and negotiations with NTPC started if the project is to be implemented," sources in the power ministry said.

A senior NHPC official said an immediate decision on the fate of the project would be beneficial for the staff, who have been posted at the site for so many years. A decision on the project would end their ordeal, he added.

The power ministry has been unable to decide the fate of the 900-MW Purulia pumped storage project in Bengal due to high generation cost.

The project, currently in the state sector, was supposed to be executed through a joint venture with National Hydroelectric Power Corporation (NHPC).

The joint venture agreement was signed between the Bengal government and NHPC in 2000.

Sources in the power ministry said, “Many issues like power tariff have not been sorted by the Bengal government and NHPC. In addition, the levelised tariff at the current price level is Rs 4.59 per unit, which is very high considering the generation cost of the state sector and NTPC projects located in Bengal.”

Located 445 kilometres from Calcutta in Ayodhya Hills in Purulia district of Bengal, the project is the largest pumped storage scheme envisaged for execution in the country. Estimated to cost Rs 3129.45 crore at November-2003 price level, the project is supposed to generate 16666.97 million units of power a year on completion.

NHPC and the Bengal government had signed a memorandum of understanding, which was sent to the power ministry for its approval. However, the power ministry is yet to clear the project. The proposal was to be sent to Public Investment Board (PIB) in 2001, but is still pending with the power ministry. Both partners have not been able to finalise arrangements for power required for re-pumping water back to the Purulia Pumped Storage. The power for re-pumping was to be supplied by the Bengal government.

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