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House panel raps Power Ministry on site selection

The Standing Committee on Energy in its report on ultra mega power projects has severely indicted the Central Electricity Authority, reports Samiran Saha.

business Updated: Nov 28, 2007 00:49 IST
Samiran Saha

The Standing Committee on Energy in its report on ultra mega power projects (UMPP) has severely indicted the Central Electricity Authority (CEA) for "not having given a serious thought" before selecting project sites for the proposed nine 4,000 megawatt ultra mega power plants to be set up by private players.



To attract investors for the UMPPs, the government had -- among other incentives like tie-ups for inputs, linkages and clearances, power-selling arrangements -- also promised the developers of the projects sites that were clear of any encumbrances.



The committee noted that the "CEA, which had a major role in selection of sites, did not seem to have given a serious thought before selecting project sites". "Though the ministry (ministry of power) has stated that state electricity boards and state companies are involved while the site is selected, the committee feels that the involvement of the state governments has just been a mere formality," the committee observed.



Strong resistance to the projects by the local population in Girye in Maharashtra, Tadri in Karnataka and Ib Vallley in Orissa could lead to these sites being eventually abandoned leading to further delays in project implementation.



In Maharashtra, government officials had to abandon the site as alphonso farmers in the region refused to yield even an inch of their land for the UMPP stating that no amount of compensation would get them the quality of land which the government was keen to acquire.



In Orissa, the locals have refused to part with their land, while in Karnataka the proposed site included a beach that the locals were not ready to part with.



Citing an example that exposes lack of coordination between the Centre and the state governments, the committee said: "Regarding the site in Maharashtra, the statement of the ministry of power that Girye was just one of the probable sites and not the final one raises questions as to the manner in which the Centre has gone about the selection of sites for the UMPPs."



The committee also said that the "development of UMPPS requires support and coordination between the various players involved, including the Centre and state governments, the Power Finance Corporation, project developers and consultants. The lack of support from any of these players could lead to delay in the development of these projects and even derail the capacity addition program".