Stake dilution issues plague OTPCL's 2400 MW project

Last Updated: Mon, Nov 05, 2012 19:10 hrs

The 2400 MW (3x800) coal-fired power plant proposed by Odisha Thermal Power Corporation Ltd (OTPCL), a 50:50 joint venture between Odisha Mining Corporation (OMC) and Odisha Hydro Power Corporation (OHPC) has hit a roadblock.

The state government that is in favour of offloading 74 per cent stake in the power project to a private player given OTPCL's lack of expertise in implementing a power project, is struggling to find a suitable strategic partner.

“Bharat Heavy Electricals Ltd (BHEL) and Larsen & Toubro (L&T) are keen on picking up 26 per cent stake in OTPCL. But none of these Central PSUs is in favour of holding a controlling stake. Moreover, they are interested to take up equity only if their equipment is used in the power plant”, an official source told Business Standard.

The 2400 MW project of OTPCL taken up a cost of Rs 10,000 crore needs 1969.78 acres of land in all which includes 987.77 acres of government land and 83.94 acres of forest land in addition to 982.015 acres of private land.

Notification for land acquisition under Section 4 (1) of Land Acquisition Act has been issued for the project. Notification under Section 6 (1) is expected to be issued soon.

The state government has already administrative approval for acquisition of 982.015 acres of private land at the project site.

The private land is to be acquired in 10 project affected villages-Aluajharana (19.68 acres), Annapurnapur (447.30 acres), Bijadiha (20.81 ares), Bhagirathapur Sasana (15.2 acres), Dhobabaheli (5.89 acres), Kateni (84.24 acres), Kantapala (45.55 acres), Kusumajodi (244.04 acres), Mahulapala (24.98 acres) and Anlabereni (74.32 acres).

The total land required for the project will be procured by OTPCL.

OTPCL has already got the water allocation from the department of water resources. With regard to coal requirement of the proposed power plant, OHPC and OMC have pledged to link alloted share of 200 million tonnes of Baitarani west coal alloted to the power PSU and 300 million tonnes from Mandakini-B coal block alloted to the mining PSU.

Entire power generated from the proposed power plant will be procured by Grid Corporation of Odisha Ltd (Gridco) as per the tariff determined through the bidding process.

OTPCL will engage a transaction consultant to assist in working out the state UMPP (ultra mega power project) model based on the experiences of Power Finance Corporation (PFC) and other states if any in this regard.

Once the process of selection of strategic partner for the 2400 MW power plant is completed and the project implementation takes off, OTPCL would revive the Rengali site for setting up of another coal-based power plant.

The project which was originally supposed to be taken up a Rengali had to be relocated to Kamakhyanagar after the Union ministry of environment and forests (MoEF) in August last year had declared the Kaniha coal block falling under the project site as a 'No-Go area'.

The state government would also approach the Ministry of Coal for allocation of additional coal block for OPTCL to meet the full requirement of coal for the 2400 MW plant.

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