CESC chooses Katikund for 1000mw Jharkhand project

Jamshedpur, Apr 27 | Updated: Apr 28 2007, 08:44am hrs
CESC Ltd has finally chosen Katikund in Jharkhand's Dumka district as the site for its 1000-mw-pithead thermal power project, for which it had signed a memorandum of understanding (MoU) with the NDA-led Arjun Munda government in September 2005.

Dumka falls in the Santhal Parganas region of the state, not far from adjoining West Bengal.

In the MoU, CESC had offered three alternative sites to the Jharkhand government---at Godda, Latehar and Chandil---to locate the project, of which only the Godda site was near a pithead.

The Katikund pithead site was decided upon later.

Sources said CESC vice-chairman Sanjiv Goenka and other company officials met Jharkhand chief minister Madhu Koda in Delhi on Friday and discussed the progress of the project in some detail.

This is the first time the RPG group will be investing outside West Bengal in the power sector. Its earlier attempt to enter Bihar around 18 years ago with a power project failed to take off.

The project, to come up at a cost of around Rs 5,000 crore, has now been envisaged in two stages of 500 mw each, instead of the earlier plan of two plants of 250 mw each in the first stage, followed by another with 500 mw capacity later on.

"We have applied for all clearances, but first let us get the coal block first," a company source told FE.

CESC will apply for the coal block to the Union coal ministry after obtaining the necessary state recommendation.

Sources said the ministry was likely to take another 2-3 months to decide on the issue.

"The project will take off the moment we get signals from the Centre and the state government, as we have applied for everything, including land for the project, water, etc," said the source.

While the first 500-mw unit is expected to come up in 36 months from the date all clearances are obtained, the second (500-mw) unit will be completed in another six months' time.

Jharkhand will have the right to buy 25 % of the power generated by the power utility at rates to be determined by the Jharkhand State Electricity Regulatory Commission (JSERC).

According to the original MoU, in order to support Jharkhand's industrial development, CESC will also be allowed to supply power directly to bulk consumers in the state at mutually agreed tariff and other terms and conditions.

Sources said the original MoU, which was valid for one year, has been revalidated between the parties.