Date:31/08/2007 URL: http://www.thehindu.com/2007/08/31/stories/2007083159710300.htm

Andhra Pradesh

Hindujas keen on power unit

Santosh Patnaik

High-level meet held in Chief Minister’s Office

VISAKHAPTNAM: Exactly 17 years after it signed memorandum of understanding for setting up a 2 X 520 MW fast-track coal-fired power plant near the city, the Hinduja group has stepped up efforts to not only revive the collapsed project but also to get permission for Special Economic Zone (SEZ).

The project, supposed to be executed by Ashok Leyland after floating Hinduja National Power Corporation (HNPC), turned controversial from the beginning with its first strategic partner, Mission Energy of US, backing out. Later, it roped in National Power Plc. of UK.

A high-level meeting was held in the Chief Minister’s Office recently to examine the revival plan of the group, which had paid advance for owning nearly 1,100 acres in and around Revada and Pallavalasa. Now, it wants to set up SEZ in the area along with the power plant, sources said.

The group is also trying to take possession of the land at the old rate of Rs.2.25 lakh per acre by blaming the authorities concerned for the ‘inordinate delay’ in clearing the hurdles for project implementation, it is said.

The then Prime Minister P.V. Narasimha Rao, had laid the stone for the project in 1994. Though NTPC-Simhadri has already completed 1,000 MW project and grounded work to double its capacity by adding 2 X 500 MW units, the HNPC almost backed out from the project by failing to achieve financial closure.

Contentious issue

The unit cost as envisaged in the Power Purchase Agreement also turned a bone of contention with the Congress as the main Opposition during Telugu Desam rule, raising hue and cry against the project accusing that the unit cost at the old rate would entail an additional burden of Rs. 500 crore a year on the consumers.

Sources said the unprecedented boom in the real estate and power sectors have inspired the Hinduja group to revive the project notwithstanding the fact that the Central Government had refused to extend the validity of counter-guarantee for failure to achieve financial closure within the stipulated time. The fate of the jinxed project is likely to be known soon with the State launching an exercise consider its plea.