Cleared after a two-year wait, the project is now estimated cost Rs 2,500 crore. The plant is being put up by Hindustan Vidyut Corporation of the Calcutta-based HDC group.

The Union ministry had some reservations about the capital cost of the project. The same has been pruned down to the present level from Rs 3,361 crore. Tariff and power purchase price have also been redone accordingly.

The curtailment was, however, opposed by Hindustan Vidyut Corporation on the ground that since the project had been approved after international bidding, the capital cost had nothing to do with decision on tariff. The project was finally awarded to the Modi outfit after eight rounds of discussions.

Sources said that now that the project had been cleared by Central Electricity Authority (CEA), too, there were visible obstacles left.

Huge lignite deposits have been lying untapped at Barsingsar, near Bikaner. The project was originally conceived at least 20 years ago but could not materialise as no definite decision was taken. At one time it was to be set up by NLC (Neyveli Lignite Corporation Ltd) but the latter gave it up after doing all the spadework.

The government is also thinking of inviting fresh bids for two more lignite-based power projects of a combined installed capacity of about 1300mw. These projects are to be set up in the Barmer district of Rajasthan.

The projects had originally been awarded to Raj-Power, an outfit promoted by Jai Singh of the former royal family of Jaipur; but due to financial constraints, the projects made no headway.

At a later stage, Reliance Power Corporation had shown some interest in the projects but finally quit it as mining of lignite was considered unviable.