Tata Power's Odisha project shelved

The company's efforts of setting up a coal-fired power station in Odisha have been stalled

Tata Power’s efforts to set up a coal-fired power station in Odisha have come unstuck despite the company settling for three locations. After failed attempts to establish the power plant with an original capacity of 1,000 Mw, later revised to 2,000 Mw, at Naraj-Marthapur near Cuttack and then at Begunia, 40 km from here, the company decided on a shore-based plant at Gopalpur on the state's southern coast.

In the redrawn project plan, Tata Power chose to use imported coal as fuel. But costlier imported coal together with the additional burden of putting up a desalination plant have pushed the project on the back burner.

Sanjeev Chopra, principal secretary (industries), Odisha, said, “Tata Power has dropped its plan to set up a coal-based power plant in the state. They have not submitted any formal proposal to put up a plant at Gopalpur. As of now, the intent to set up any coal-based project by the company is not there.”

Tata Power executives could not be immediately contacted for comments on the status of the Odisha power project.

One of the key reasons for the company shelving its original plan is the de-allocation of its Mandakini coal block. The block was de-allocated on a Supreme Court order that saw scrapping of licences of over 200 coal blocks. 

The original location for setting up the plant was Naraj-Marthapur, an ecologically sensitive zone. Initially, Tata Power had planned to set up a 1,000 Mw plant, later enhancing the capacity to 2,000 Mw. 

But mounting protests from green activists over emissions from the power station near the Chandaka-Dampara sanctuary had forced the company to switch to gas as fuel.
 

Tata Power thereafter submitted a revised application to the state government for a gas-based plant,  banking on supplies from the Surat-Paradip natural gas pipeline proposed by GAIL. But the looming uncertainty in gas availability prompted the company to seek an alternative site for its power plant. 

This was despite the fact that 1,000 acres of land were already acquired for the project with Tata Power forking out Rs 100 crore as the land purchase cost to Odisha Industrial Infrastructure Development Corporation (Idco).

The company signed a memorandum of understanding with the Odisha government for establishment of a 1,000 Mw coal-based plant on September 26, 2006. It had later proposed to scale up capacity of the plant to 2,000 Mw.

Based on Tata Power's request, the state government had approved the change of site from Naraj-Marthapur to Begunia, where 975 acres of land were identified for the project.