Bengal offers to renegotiate PPA for JSW's Salboni project

In the wake of Sajjan Jindal's recent announcement to put the Rs 35,000-crore integrated steel, power and cement project at Salboni on hold, the West Bengal government is now ready to renegotiate power purchase agreement (PPAs) for the project, which it had cancelled earlier.

“We are ready to renegotiate with JSW for the PPAs if they are interested do the project. They should show the keenness to take forward the project,” West Bengal power minister Manish Gupta told Business Standard.

With West Bengal turning into a power surplus state, partially due to lack of industrial activity, the state government had earlier in the year cancellled some of the power purchase agreements (PPA) with combined capacity of 1,000MW, including a 300 MW PPA with JSW.

“If PPA is the problem, we are ready to renegotiate. JSW should show the right intention to take forward the project,” Gupta added. JSW Steel did not respond to state government's offer renegotiate the PPA once again.

If the PPAs are once again put in place, this would provide a lifeline for the project, as JSW Steel may be in a position to kick start the project with the power plant. The assurance from the state government may also prompt the company to aggressively bid for the coal block.

Recently, Sajjan Jindal during his visit to Kolkata announced to keep the project on hold. "There was a power purchase agreement between West Bengal State Electricity Distribution Company and our group which is no longer valid. If we get these blocks after the auction again, then we will plan on how to go about it," he had said.

After several run-ins, West Bengal government and JSW Steel had reached an understanding that work on the power project would be taken up first since the steel plant was held up due to want of iron ore. JSW group had planned to implement the 600 MW power project first banking on a PPA with West Bengal State Electricity Distribution Company for 300 Mw.

However, the cancellation of PPA by the state government as well as Supreme court verdict cancelling the coal blocks alloted to the project, jeopardised JSW's plan to implement at least the power plant.

Meanwhile, state government's change of stance to renegotiate the PPA seems to be following locals' protest, which opposition parties, especially BJP is trying cash in on. In fact, Trinamool Congress too sent its state president and MP Subrata Bakshi to organise a dharna.

“We want the project to happen. The huge land cannot lie idle. We could solve the problem in 12 hours if we had all the power. But the Centre has a role here,” Bakshi said.