The coal-fired project needs 1.03 tmc per annum of water which is to be released from the Kabini river, an offshoot of the Cauvery. However, this requires the clearance of all the Cauvery basin states in the south, which the promoters did not receive. The centre may not extend the deadline for submission of another revised DPR which may have very serious consequences for the promoters of this project.

The DPR also does not include clearance from the centre for allocation of coal. While the company has decided to use imported coal for the project, no firm commitment has beenreceived from any supplier before submission of the DPR.

While the state government gave an assurance for allocation of water in March 1996, the department of irrigation also gave its clearance before the submission of the first DPR in November 1997. Following the Cauvery accord, earlier this year the company now needs approval from all basin states.

Owing to the delays in the project taking off, Ansaldo Energia of Italy, one of the joint venture partners decided to opt out in June this year. Mysore Powergen and Ansaldo had signed an MoU in the presence of Italian prime minister Romanov Prodi in January this year, to set up the project in Chamlapur, near Mysore.

Mysore Powergen is promoted by the US-based Public Power International (PPI). Malaysian entreprenuer Kotek Abadi is also likely to acquire a stake in the project once some initial headway is made. Black & Veatch were selected as the EPC contractor for the power plant last year.

The Karnataka government has already awarded the project thebuild-operate-own status and promised all clearances in the shortest period. The state government has also allotted 1,800 acres of land for the project.

The greenfield project's estimated cost is Rs 4,500 crore. The location, some 25 km from Mysore, is considered ideal for a power project due to its topography and its proximity to water. The transmission line is likely to be put up by National Grid Corporation and Karnataka Electricity Board.

The project has been mired in controversy in the past owing to its equity structure. While the state government signed an MoU with PPI in 1992, the project was given the green signal only in November 1995, and subsequently land was allocated.