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Home News Power Sector News Acute power crisis prompts Tamil Nadu to take up Rs 8,000 cr project

Acute power crisis prompts Tamil Nadu to take up Rs 8,000 cr project

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JayalalithaaWith Tamil Nadu reeling under acute power shortage, Chief Minister J Jayalalithaa said the state would take up the Rs 8,000 crore Super Critical Thermal Power Project at Udangudi (Tuticorin district) on its own in the face of continued delay. Recalling that a joint venture, Udangudi Power Corporation Limited for the 1,600 mw project (2x800mw) between TNEB and BHEL had been formed as early as in December 2008 during DMK regime, Jayalalithaa however said many factors had rendered the coal-fired project a non-starter.

"Therefore, I have decided to implement it as a state government project which will allocate the entire estimate of Rs 8,000 crore as share capital to the Tamil Nadu Electricity Board (TNEB) which will implement it," she said in an official statement .

The entire 1,600 mw of power will be utilised by Tamil Nadu upon completion of the project and power generation therein, Jayalalithaa said.

As per the original funding pattern, TNEB and BHEL will contribute 26 percent each of the total share capital of Rs 8,000 crore while the rest 48 per cent would be either borne by the private firm implementing the project or sought from a funding agency, she said.

"However, no decision was taken on the private firm implementing the project till May 2011, i.e till the end of DMK regime. The percentage of credit and share capital was also not decided upon while clearance from Union Environment Ministry was also not obtained due to lack of Long Term coal linkage," she said.

These factors, besides "lack of cooperation from BHEL," resulted in the project not being implemented, she said.

As the Union Coal Ministry had not issued orders for allocation of coal for the project, the same would now be imported following clearances from Union Environment Ministry, she said. The project will now earn a Mega Power Status which would result in many tax sops, thus lowering the input costs.

Jayalalithaa had taken up the issue of necessary allocation of coal linkage for the Udangudi project with Prime Minister Manmohan Singh during his visit to the state in December last.

Tamil Nadu has been suffering from acute power shortage, even as protesters are stalling the commissioning of the Koodankulam Nuclear Power Plant over safety concerns.

Source- Economic Times


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