The Hindu Business Line : GMR group plans thermal plant in Chhattisgarh

Bangalore June 5 The GMR group has signed a memorandum of understanding with the Chhattisgarh Government for setting up a 1,000-MW thermal power station.

This would be a pithead-based merchant power station, similar to the one under development in Angkul, Dhenkal district of Orissa. But the site for the power plant is yet to be identified. GMR Energy, Director, Mr K.V.V. Rao, said, "We are still in the process of identifying a suitable location to fit our requirements."

GMR, he said, was looking for a site that would be proximate to the coalmines and at the same time close to a national transmission grid. But Mr Rao said that the group was not prepared to accept displacement of local population from agricultural land or resettlement of tribals from the region. This was especially in the view of the recent tensions that rocked West Bengal's Singur and Nandigram.

Some locations had been tentatively identified in Chhattisgarh, he said. These were in the districts of Raigarh and Champa that conformed to the group's criteria, he added.

Fuel requirement for the power station is estimated at 4.8 million tonnes per annum at 80 per cent plant load factor. The State Government has recommended the fuel linkage for the project. Alternatively Chhattisgarh would also recommend allocation of captive coal blocks to the power plant. There would, therefore, be no royalty payments.

Instead, Mr Rao said the MoU provided for 5 per cent priority power allocation to Chhattisgarh at variable costs, as determined by the State Electricity Regulatory Commission. In the event of captive coal block allocation, the power availability to Chhattisgarh would go up to 7.5 per cent. In addition, Chhattisgarh would also have a charge on 30 per cent of power generated from the plant, on which it would have the right of first refusal.

Project cost

The project is estimated to cost about Rs 4,500 crore. However, the financial structure has not been worked out as yet, Mr Rao said, though it would be on a 70:30 debt-equity ratio.

GMR's foray into Chhattisgarh comes two years after both Karnataka state-owned utility Karnataka Power Corporation and the Gujarat Government had attempted to set up a 500-MW pithead-based joint venture in the region, for meeting their respective power requirements. The project proposal had fallen through in view of royalty payments demanded by the State Government. Chhattisgarh had sought a royalty of up to Re 1 per tonne of coal and dedication of 12 per cent of the capacity for the State's own needs. The joint venture partners ditched the project, as acceding to these demands would have escalated the fixed costs and consequently the power tariffs well beyond the benchmarked tariff of Rs 2 a unit.