The Hindu Business Line : NLC tripped by land acquisition problems

Chennai, Nov. 26 The heavy rains in the southern districts have caused flooding of the lignite mines of Neyveli Lignite Corporation. This has caused a practical stoppage of generation at the central power station, accentuating the already acute power shortage problem in Tamil Nadu.

NLC, which has 2,490 MW of installed capacity across two plants, is a major source of electricity for the four southern States. Last year, the plants produced 17.5 billion units of electricity.

The obvious question is: could NLC not have stocked up lignite? After all, this is not the first time that rains are causing disruption of mining.

“Don’t blame us,” says the company.

In the last one year, the problem of power shortage in the southern States was so intense that NLC was forced to consume everything that the mines produced. But that is only one side of the story.

The other side is that the company’s plans envisaged expanding its Mine-II to open up more areas for production. It wanted to expand the mines to the South and the East of the existing mines. But the plan got stuck at what is becoming a national stumbling block in infrastructure development: land acquisition.

“If we had been able to do it, we would have built up sufficient buffer stock and would not have had to shut down our plants today,” said Mr V. Sethuraman, Director-Power, NLC.

Earlier, the Rs 3,600-crore company had offered Rs 1.5 lakh an acre, but to no avail. In March 2008, the company, driven to desperation, upped the offer to Rs 5 lakh an acre.

The resistance to sell began to yield, but the process got delayed. Now, about half the required land has been acquired and half of the rest has been committed for. But there is still some problem with the balance.

With the existing mines running to full capacity and without new mines, NLC could not build a buffer stock.

Neyveli sits on a large aquifer. There have been times in the past when the water pumped out of the mines was piped down to a thirsty Chennai. But now, because of the heavy rains, the area has gotten flooded beyond the capacity of the pumps to drain it out.

What now? “We are keeping our fingers crossed,” Mr Sethuraman said. “Everybody prays for rains. We pray for the rains to stop.”

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