New Delhi, May 30: Assam today signed a pact with the National Thermal Power Corporation Limited (NTPC) to set up a 750-MW thermal power plant in Bongaigaon at an estimated cost of Rs 3,500 crore.

The power plant will come up at the existing facilities of the now-defunct Bongaigaon thermal power station of Assam Power Generation Corporation Limited, a successor to the Assam State Electricity Board. The 240-MW plant has remained inoperative since 1998 owing to the irregular supply of coal.

“The project will go a long way in solving the power crisis in Assam,” chief minister Tarun Gogoi said after an memorandum of understanding was signed between NTPC, the state government and the Assam power corporation here.

The Bongaigaon project, the NTPC’s first power plant in the Northeast, is expected to start generating electricity from the first 250-MW unit by 2009-end. It will become fully functional in just over three years. While NTPC chairman and managing director T. Sankaralingam promised to commission it within 30 months, power secretary Anil Razdan urged the corporation to commission it within 28 months and bring down the per megawatt cost from the estimated Rs 5 crore to Rs 4.75 crore.

Assam will receive 400 MW power from this project.

Razdan, however, expressed concern over Assam’s growing power losses, which are up by 33 per cent, and asked the state to bring it down to 15 per cent in order to avail of conversion of loan amount into grant. This 15 per cent should be sustained for the next five years, he added.

“It is possible. Otherwise, the community will suffer,” Razdan said. He cited the example of nine towns and cities of Andhra Pradesh which have successfully brought down transmission and distribution losses, and said others can do it too and supply more power to the rural areas.

Reacting to the tough conditions put forward by the Centre on reducing power losses in Assam, state power minister Pradyut Bordoloi said it would be difficult to reduce the losses to 15 per cent immediately.

Asked if that meant the loan component in the Rs 3,500- crore power project would not be turned into grant, Bordoloi said the condition has been contested by the state and the Prime Minister will come up with the final policy in a month or two.

Assam has a peak demand of 800 MW, but its power generation capacity is only 350 MW. The state also insists that the supply of 125-MW of power from Kahalgaon should continue till the Bongaigaon plant is commissioned.

Land will be transferred to the NTPC at the earliest, Sankaralingam said, quoting the state government.