Kanti Thermal Power Station in Muzaffarpur. Picture by Prakash Kumar

Muzaffarpur, Feb. 23: Call it callousness or lack of foresight, a thermal power station in an energy-starved state has stopped production from last year because of lack of funds.

Kanti Thermal Power Station (KTPS) in Muzaffarpur closed down in December last year because of funds crunch and subsequent bankruptcy, courtesy the Bihar State Electricity Board (BSEB), Patna, that owes KTPS Rs 40 crore.

KTPS deputy general manager B.K. Sharma told The Telegraph: “BSEB owes Kanti Bijli Utpadan Nigam, of which KTPS is a part, Rs 40 crore. The board has not paid a single penny for the past couple of months for the electricity purchased from KTPS. As a result, the treasury of the power station is empty.”

The power station was forced to stop production on December 12 last year, as it did not have the funds to purchase coal and diesel. The two units of KTPS were producing 85MW of electricity before they were shut down. A source said their closure was a severe blow to the state that was already suffering from an alarming shortage of electricity. Sharma said coal and fuel cannot be purchased on credit from the market. He added the power station, at present, needs at least Rs 15 crore to restart operations. Efforts were being made to recover the amount from BSEB.

KTPS management has requested the chief secretary, energy secretary and other officials of the board thrice to expedite the process of payment of dues.

Laliteshwar Shahi, a representative of Thermal Kamgar Unit, said the power unit was incurring double loss as on one hand it was earning nothing and on the other it had to pay salary to the employees. The machines at the unit, too, would need maintenance if they remained idle for long, he added.

BSEB spokesperson H.R. Pandey said: “We don’t believe KTPS is closed because of lack of funds. It has shut down because of an acute shortage of diesel and coal.”

There is some light, however, at the end of the tunnel. The construction work of two thermal units of 195MW capacity each on the sprawling premises of KTPS has started. Kanti Bijli Utpadan Nigam has signed an agreement with Hindustan Petroleum Corporation Limited, Mumbai, for the construction of two thermal chimneys by 2013. A sum of Rs 233 crore would be spent on the project.