Calcutta, Dec. 25: The troubled Raghunathpur thermal power project of the Damodar Valley Corporation (DVC) in Purulia has got a lease of life with the completion of a 12-km pipeline, which will channel water to the power plant from the Panchet dam.
After a delay of almost five years, the first phase of the project will be formally completed once the second 600 megawatt (MW) unit is ready to start production in January.
In the first phase, the DVC will operate two units of 600MW each. Two more units are planned in the second phase. The project will generate 2,520MW when completed. The first unit has begun commercial operation in March this year. Company officials expect the second unit to go on stream by January, much ahead of the power ministry's estimation by March.
"Work on the 12km pipeline from Panchet has been completed. We hope the second unit to go onstream by January. Generation will depend upon the signing of power purchase agreements," a senior DVC official said. He added that the central power utility was yet to acquire close to 58 acres for the railway corridor and would have to continue sourcing coal by road for the time being.
The first phase of the project was supposed to come onstream in 2010 but land acquisition issues have delayed it by several years. Critical infrastructure such as water and rail corridor could not be built on time. The escalating project cost has added to the DVC's financial crunch, the primary source of which is unrecovered dues from Jharkhand.
The DVC has invested close to Rs 8,000 crore in the Raghunathpur project with a debt-equity ratio of 72:28.
The future of the project, however, could depend on another state-owned thermal power major NTPC.
The DVC, which has an outstanding debt burden of close to Rs 30,000 crore, has firmed up plans to hive off the project to NTPC subject to the approval of the Bengal and Jharkhand governments, which have stakes in the organisation. NTPC is likely to take care of the debt component and the DVC will save around Rs 80 crore per month on interest expenses.
Union coal and power minister Piyush Goyal has held several rounds of discussion with both the NTPC and the DVC officials after he announced here in August that the government was working on a "win-win framework" to revive the DVC and facilitate NTPC's growth.
The prospect of the recovery of outstanding dues has revived with Jharkhand Urja Vikas Nigam benefiting from the debt-restructuring scheme Ujjwal Discom Assurance Yojana (UDAY).
Under the bailout plan, the state government will reportedly have to pay only the principal amount of unpaid bills to the DVC plus a certain amount of delayed payment surcharge, which amounts to Rs 6,000 crore as on September 30.
"For the time being, Raghunathpur thermal power project is with the DVC and our aim is to prepare the project for commissioning," the DVC official said.
Sources said certain milestones had been laid before the DVC, which included the completion of the first phase. But, there is still work to be done on building the rail corridor.
"Besides water, coal is a necessary input to run the plant properly. At present, coal is being sourced from BCCL coal mines in Jharkhand. The rail corridor has to be built for which more land is necessary. Also, power purchase agreements have to be in place," an industry source said.
