Guj seeks NLC's nod to develop 1500 Mw project

In yet another effort to put its 1,500-Mw power project proposed at Surat back on track, the Gujarat government has urged the Union power ministry to ask Neyveli Lignite Corporation (NLC) to issue it a no objection certificate.

The project, proposed in south Gujarat, has been delayed for about one-and-a-half years due to power sharing problems.

The state government is seeking the NOC for developing the project on its own or by any state public sector undertaking nominated by it.

The issue was also raised by Saurabh Patel, state energy and petrochemicals minister, during the power ministers' conference at New Delhi recently. The government wants to use lignite reserve available in the state so that full capacity could be dedicated to the state power grid.

Neyveli Lignite and the Gujarat government had signed a memorandum of understanding in July 2006 to set up this lignite-based power project at an investment Rs 7,500 crore. Work on the project was slated to start in 2007.

According to sources closely monitoring the development, the project is stuck because the Gujarat government had expressed its desire to get a major chunk of power from the project for the sate, while the Centre wanted the allocation as per the Gadgil formula, a method of transferring resources from Centre to states on the basis of income and population.

If this formula is adopted, Gujarat would not receive more than 50 per cent of the power. Gujarat Power Corporation Limited is a partner in the project.