The independent power producers (IPPs) continue to face hurdles in Kerala with politics threatening to trip the proposed 240-mw coal-fired thermal power plant to be set up by the JP Power Ventures in the northern district of Kannur. The project has run into rough weather immediately after the land purchase agreement with the Kerala Industrial Infrastructure Development Corporation (Kinfra) was signed, with a powerful section of the ruling CPI(M) coming out in open against the project, forcing the government to retract its stand.
Incidentally, the site at which JP Power has proposed to set up the project was once the home for the Kannur Power Project promoted by KPP Nambiar and Associates which planned to set up a 513-mw, combined cycle, naphtha-fired thermal power plant at an estimated cost of Rs 1,470 crore way back in 1997. The promoters were forced to dump the project after it was caught in a political storm after the fallen US energy giant Enron picked up a 74% stake in the venture.
According to sources, the trouble started brewing for the JPVL?s Kannur project after the promoters inked a deal with Kinfra for the allocation of 164.22 acre of land at Kinfra?s industrial park at Kalliassery and Pappinissery villages in Kannur district in April this year. As per the agreement, the land was allotted to JPVL to set up a 240-mw, coal-fired thermal power plant, and a 1.5 million tonne per annum (tpa) cement grinding unit and a minor port to import feedstock at an estimated cost of Rs 1,500 crore. The project was expected to be commissioned within 44 months after the agreement was signed. The project had the full backing of the state industry minister Elamaram Kareem and other top honchos of the government.
However, a powerful section of the local unit of CPM came out in open against the project raising environmental concerns and other development issues forcing the government to develop a cold feet about the project. A top office bearer of the CPM, known for his proximity with the state party supremo Pinarai Vijayan, is on record saying that the the proposed power project by the Jaypee Group was not in the agenda of the government and the party would never allow any project to be implemented in the area against the wishes of the local people, putting a big question mark over the project.
A source in Kinfra, however, told FE the agency had stuck to its brief given by the industry department in its letter and it is at a lose to understand about the reasons behind the sudden opposition against the project since nobody had so far raised any questions of corruption. ?The Jaypee Group was selected by a committee headed by the chief secretary after three rounds of tendering and the land was allotted as per the rules. There is no violation of any norms whatsoever in awarding the project and land to the Jaypee Group. Since, the initial opposition was against the cement plant, we were able to convince the promoters to shelve the cement project and go ahead only with the power project,? the source said.