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Hold-up cloud over Banka project

Minister says demand for power produced by proposed plants deciding factor

By Sanjeev Kumar Verma
  • Published 13.06.17
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The fate of the 4,000MW ultra mega power project in Banka district is uncertain after a Union minister said on Monday that the Centre would proceed on proposed power plants only if there are takers for the electricity they would produce.

Piyush Goyal, Union minister of state for power, coal, new and renewable energy and mines, was speaking to reporters through video-conferencing at an event organised to highlight achievements in the energy and mining sector in the first three years of the Narendra Modi-led government when he was asked what steps the Centre was taking to expedite the project in Banka."The Centre has already identified the coal block for the power plant but any further development on the project would depend on availability of power purchase agreements," Goyal replied. "Our national exchange has already more power than required and the viability of new power projects would depend on the availability of buyers for the power produced."

According to the power ministry website, the National Exchange for Power had met 138 gigawatt (1GW=1,000MW) of the states' power demand on June 12, 2017, and still had around 4,000MW of surplus power available.

Bihar energy minister Bijendra Prasad Yadav reacted sharply to Goyal's comment on the fate of the ultra mega power project (any plant with a capacity to generate 4,000MW or more electricity is called an ultra mega power project).

"The Union minister is making a mockery of the promise that Prime Minister Narendra Modi had made to the people of Bihar while announcing the special package for it ahead of the Assembly elections," Bijendra told The Telegraph.

According to the Centre's official press note - issued on August 18, 2015 - on the special package announced for Bihar, Rs 20,000 crore was to be invested for the Banka project. This sum was not part of the Rs 1,25,003-crore special package the Prime Minister had announced for Bihar but was under the head of "other investments" under which an additional sum of Rs 40,657 crore was meant for the state.

The Centre had given clearance to the Banka project in January 2014. Before that, a Central Electricity Authority team had visited Kakwara village in Banka district, around 250km southeast of Patna, to assess the ground reality.

Energy minister Bijendra had raised the power plant issue during the previous meetings of state energy ministers held in Delhi on May 3 and 4. He had pointed out that the Bihar government had already earmarked 2,440 acres in Kakwara village for the power plant and the water resources department had allocated 120 cusecs of water.

Pointing out that the coal ministry had allocated in-principle the Pirpainti-Barahat coal block on the Bihar-Jharkhand border for the Banka project, Bijendra sought its formal allocation. The Centre, however, has not yet done so and on Monday the Goyal added another clause in the power purchase agreement.

"It is very tough to find buyers for power from a plant that is awaiting the Centre's approval on so many accounts," said a senior official of the Bihar State Power Holding Company Limited.

Power purchase agreements are only made once all necessary formalities are complete, the officer claimed.