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Home News Power Sector News Arm-twisting Jharkhand govt to raise tariff - Reliance Power exits Tilaiya UMPP

Arm-twisting Jharkhand govt to raise tariff - Reliance Power exits Tilaiya UMPP

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RelianceJharkhand government on 28-04-2015 blew off the lid of corporate conspiracy that worked behind Reliance Power pulling out of the 4000MW Tilaiya Ultra Mega Power Project (UMPP). Within 24 hours of Anil Ambani led Reliance Power's fully owned subsidiary, Jharkhand Integrated Power Limited (JIPL) announcing to terminate the Power Purchase Agreement (PPA) citing land acquisition delay as the reason, chief secretary Jharkhand Rajiv Gauba addressed media clarifying the position of state government. He described it as an arm twisting mechanism for raising the power tariff beyond what was bided in the PPA.

Putting the onus back on the Reliance Power, he said that the unilateral decision of the corporate at a time when talks and actions for all pending processes were underway, on a fast track, was beyond his understanding. "They (Reliance) never raised the issue of land or forest clearance during the power secretaries meet on April 17, instead what they were concerned about was the revision of power tariff," he said adding that recently company vice president had met deputy commissioner, Hazaribag and expressed readiness to submit the land requisition in new format as was amended and required by the state government. "Company officials were ready to submit the requisition by May 5 for acquiring land from Raiyat as required in the project," he said.

Reliance Power bagged the Tilaiya UMPP from Power Finance Corporation (PFC) in 2009 by aggressive bidding, quoting a price as low as Rs.1.77 per unit. Gauba said that the aggressive bidding was done just to acquire the project and later on the company was looking for ways to pull out of it. "After all they are private players and we cannot compel them to continue with the project but citing improper reasons like land acquisition and forest clearance delay, sends a wrong message about the state," he said. Gauba said that Reliance Power approached the Central electricity Authority (CEA) to raise the tariff in September 2013 which was subsequently put before the energy secretaries meet as well," he said trying to bring focus on the real issue.

Speaking about the exact status, Gauba said that 417 acre land was transferred immediately but no progress has been made even on that piece. "We agree that the project required more land including the 1220 acre forest land which passed stage II clearance of the government of India," he said. As the project was transferred from PFC to a private company, government of India directed it to pay the price of forest land apart from compensatory afforestation and given the absence of any land pricing mechanism for forest land, the issue was held up. Gauba said that recently state worked it out with the centre and fixed a price of about Rs.300 crore for the plot of forest land being transferred to the company. "May be they were not ready to pay that price and preferred pulling out of the project," he said.

Asked as to what would be fate of Tilaiya UMPP now, Gauba said that the matter would be discussed with the ministry of power. "We would finish ongoing processes of land acquisition, tie up of water reservoir and linkage with a coal block thereafter there could be several models for development of the project," he said. One such option could be UMPP on 'plug and play' basis, recently envisaged by the Centre for which state would carry out all formalities and invite a suitable party to commission and operate. Gauba however said that final decision about the model would be taken in consultation with the power ministry.



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