NMDC halts Gonda power project for now

Rs 3,000-cr plant seen unviable

NMDC has put its proposal to set up a Rs 3,000-crore power plant in Gonda of Uttar Pradesh on the back burner, as it feels it is not viable, according to a senior official of the state-owned miner.

"An internal committee felt that setting up power plant there would not be a better option now under the present circumstances. The whole plan may be taken up at a later stage. We can't even rule out dropping the whole idea," the official told PTI.

MoU signed last year
In August last year, a memorandum of understanding was signed between NMDC Power Ltd, a wholly owned subsidiary of navratna public sector undertaking NMDC Limited, and IEDCL, a subsidiary of IL&FS, for setting up a 2x250-Mw thermal power plant at Gonda, with the investment outlay of over Rs 3,000 crore.

Gonda was the constituency of former Steel Minister Beni Prasad Varma and NMDC comes under that ministry. Varma lost in the recent general elections from Gonda.

An Expert Appraisal Committee under the Ministry of Environment and Forests had in October last year refused to clear the proposal on the grounds that the place where the project is proposed is fertile agriculture land.

"The Ministry of Environment and Forests had asked us to come with alternative sites for the power plant and as of now there is no development on that issue," the official added.

When asked about the status of the power plant, NMDC's Chairman and Managing Director Narendra Kothari did not give a direct reply, saying that the miner is yet to study the issue. "We are looking into various things. We have not yet finalised it because proper study has to be done," Kothari had said earlier on the sidelines of the recently held annual general meeting here.

Meanwhile, NMDC has spent Rs 5,000 crore so far on the 3-MTPA steel plants it is setting up at Nagarnar in Chhattisgarh, the official said.

"By December 2016, the plant will be commissioned. By that time 80 per cent of the total Rs 15,500-crore budget for the plant will be spent.

Afterwards some amount will be kept with us as performance guarantee in some cases. The total payments will be made only after 2017-18," the official said.

According to Kothari, the total outlay of the project may slightly exceed owing to factors such as hike in commodity prices and inflation.