Tneb Clearance Revives Bses Power Plan

The BSES-promoted 250 mw Srimushnam power project in Tamil Nadu has received a fresh lease of life with the Tamil Nadu Electricity Board (TNEB) deciding to reissue the clearance granted under section 44 of the Electricity Supply Act.

Earlier, the board had withdrawn the clearance issued to this coal-based power project which was challenged in the Chennai High Court by BSES.

BSES chairman and managing director R V Shahi said, "TNEB has communicated to us that they will be issuing the clearance afresh. We have withdrawn the case in the high court following this assurance."

The clearance will however come with the rider that the power generated by the project cannot be sold directly in the state as earlier envisaged. Instead, it will have to be sold to the nodal central agency Power Trading Corporation (PTC) for selling power across states."

"We are already in talks with the corporation for selling power. Even, TNEB may buy the power but it will be through PTC," said Shahi.

The Srimushnam project has been hanging fire for over four years now. Like every power project conceived in the nineties, this project too has not really got off the ground due to unclear government policies.

The project is being set up by the Tamil Nadu Industries Captive Power Company, a 51:49 joint venture between BSES and a group of textile exporters from Tirupur in Coimbatore. The project was basically meant to cater to the captive needs of these textile exporters with the excess power being sold to TNEB. Later on the board did a volte face and said that it cannot accommodate the project as it had scaled down its projections for power demand. Secondly, there were too many other projects coming up in the state.

BSES is now planning to renew its long standing plan to double the capacity of the project to 500 mw. Analysts also opine that selling power to PTC would benefit the company in view of the weak financial health of TNEB.