Coal min contests GoM view, wants NTPC project shifted

Written by Subhash Narayan | New Delhi | Updated: Dec 17 2012, 06:33am hrs
Seeks halting of work on 1,980-MW plant in coal-bearing area of Jharkhand

The coal ministry has contested the suggestion made by a group of ministers (GoM) to allow NTPC to set up a 1,980-MW power plant in the coal-bearing area of North Karanpura in Jharkhand. Moving a Cabinet note, it has sought directions to the PSU to halt work on the project and move to a non-coal-bearing area in the state. The ministry has also approached the PMO for necessary directions.

NTPC had proposed to set up a super thermal power project, using three units of 660-MW (3*660 MW) super-critical technology, near Tandwa town in Jharkhand, way back in 1999. The foundation stone for the project was laid during AB Vajpayees regime at the Centre.

Ever since, NTPC and Coal India (CIL) have been engaged in a turf war over the project, with the latter insisting that the power project be moved from its current location as it sits on coal reserves of about 6 billion tonne enough to meet lifetime coal requirements of about 50,000 MW of power projects.

The coal ministry has approached the cabinet committee of infrastructure (CCI) to direct the ministry of power and NTPC to relocate the plant to Kanhakala village, 15 km northeast of Chatra in Jharkhand. Justifying the proposal, the ministry has said it would allow CIL to immediately start coal mining in the area to meet the growing fuel demands of the power sector.

The coal ministry, in its note to CCI, said NTPC has made meagre investments in the project and only a portion of land acquisition has been carried out. It said the Jharkhand government has also invested just R74 crore on a reservoir required for the plant. Therefore, moving out the project would not entail any financial loss, even as the power PSU would stand to gain from rich water sources near the new site. Since the new location does not have any physical restrictions, the plant capacity can be expanded to 4,000 MW... the note said.

The power ministry and NTPC, however, want the project to stay at North Karanpura as proximity to the coal source would keep fuel and transportation costs down.

Moreover, the project has already got financial support from the Japan Bank of International Cooperation, which may not be amenable to a change of location. A power ministry official said the decision of the GoM should be respected. A coal ministry official, however, said: We hope to get a favourable decision from the CCI as it would be in the larger interest of the growth of the energy sector in the country.

The project has been the bone of contention for the power and coal ministries. Different ministerial groups have been entrusted with the task of finding an amicable solution to the issue. The matter was first referred to the Cabinet, which, subsequently, constituted the GoM on it, headed by then finance minister Pranab Mukherjee. The GoM then constituted an expert panel under member (energy) Planning Commission, BK Chaturvedi. The expert panel offered four options keeping the NTPC project at the existing location with safeguards; shifting it outside the coalfield; abandonment of the project; or to reduce its capacity.

The GoM accepted the first option, which has now been challenged by the coal ministry.