Bajaj Hindusthan quits 1,980 MW UP power project

Written by Deepa Jainani | Lucknow | Updated: Jan 4 2013, 06:54am hrs
The lights are going out in Uttar Pradeshs power capacity addition plan and the villain is once again land acquisition. Bajaj Hindusthan has decided to pull out of the R10,000-crore, 1,980 MW Bargad power project planned in Chitrakoot district, following the recent exit of Jaypee Group from the R7,000-crore, 1,320 MW Karchhana project.

The company had signed the memorandum of understanding with the Uttar Pradesh Power Corporation in December 2010, but not even 10 out of the required 13,000 acres have been acquired so far, sources told FE.

We have informed the state government and the BSE about our decision to withdraw from Bargad. We are seriously considering shifting the Bargad project to Lalitpur as part of its Phase II. But it is not yet final, said a Bajaj Hindusthan official.

The Bargad project MoU was among the 10 signed during the previous Mayawati regime. All projects were expected to go on stream by 2015-16, generating a combined 11,000 MW. However, apart from Lalitpur, work has not started on any other project. Expected to commence by 2015, the Lalitpur project will give UP 90% of its electricity. The developer can sell the balance in the open market. Government officials had earlier stated that UP would become power-surplus by 2014-15 and people would get uninterrupted supply.

The Bargad project has been mired in controversy for a long time.

Initially, the project was to be set up by NTPC, but the developer and the state could not reach an agreement on power sharing. Eventually, the Mayawati government decided to go ahead and grant the project to Bajaj Hindusthan group. Meanwhile, NTPC decided to set up the project on the Madhya Pradesh side of Bundelkhand.

The Karchchana project too was in trouble even before it was awarded to the Jaypee group in 2009 after more than a year of dithering, several re-biddings and postponements. The name of Jaypee Associates was finally decided by the Mayawati government late at night in February 2009 through a cabinet-by-circulation.

The Mayawati government had announced that UP would ride the power wave, thanks to a blitz of MoUs and outright power purchase as part of the plan to achieve 25,000 MW capacity by the end of the 12th Plan period.

Sceptics say even if 30-40% projects take off, it will be a boon for the state, which is facing acute power shortage and has seen no capacity addition in almost two decades. No new industry is willing to set foot here for lack of infrastructure, mainly power. There have been many instances of established industries moving to neighbouring states due to the power crunch, said an industry association spokesperson on condition of anonymity.

Speaking to FE, another industry expert said electricity is the most critical necessity for not only setting up industries but also for developing infrastructure, agricultural growth as well as for other social indicators such as health and education. The development of the state depends on the availability of power. It is the biggest growth engine and no economic growth or employment generation can take place without it, he stated.