Power project stalled as Gujarat, centre spar over allocation

CHENNAI - An integrated lignite mine-cum-power project planned by Gujarat and the state-run Neyveli Lignite Corporation (NLC) here is in limbo after the state government said it wants to keep all the electricity generated for itself.

“The project has not progressed further on the issue of share of power to the state,” Gujarat Chief Secretary A.K. Joti told IANS.

Signed in 2006, the deal proposed setting up an integrated project in Valia in Gujarat, with NLC holding 74 percent of the project and the Gujarat Power Corporation the rest. A pact for mining 12 million tonnes of lignite per annum was signed, and a 1,500-MW power project was proposed to be set up in two phases.

The first phase proposed to mine eight million tonnes of lignite and build a 1,000-MW power plant.

The project hit the block as the Gujarat government wanted the entire power generated for itself, which the centre refused.

“It seems the Gujarat government wants to go alone with the project. We have written to them several times, but they did not reply,” an NLC official told IANS on condition of anonymity.

Any joint venture with a state-run power company requires 57 percent of the electricity generated to be supplied to the national grid, he said, adding that the rule has been in place for two decades.

There are however some exceptions to the rule. For example, in Andhra Pradesh, the entire 1,000 MW of power generated by the National Thermal Power Corporation’s Simhadri project is supplied to the state.

In Rajasthan, the entire 250 MW of power generated by an NLC unit is supplied to the state.

According to the NLC official, the company is interested in the integrated project in Gujarat, and not just mining.