Orissa Decides Against Levy Power

The Orissa government has agreed not to insist on levy of 12 per cent free power from the 3000 mw Talcher Super Thermal Station of the National Thermal Power Corporation (NTPC) coming up at Kaniha in the Talcher coal belt, in Orissa.

This has cleared the path for setting up the second and third stage of the power station, the work on which was jeopardised due to the state's stand on supply of free power to it. The first stage of the project, however, had been completed sometime back. Each stage consists of two units of 500 MW each.

Though the state government at present draws its share of power from the first stage, it has refused to avail the offer of 50 per cent share of power from the second and third stages of expansion on the grounds of surplus power in the state. The state government's lenient views on the project was conveyed to the NTPC chairman-cum-managing director Rajinder Singh during his meeting with the chief minister J B Patnaik on Tuesday. Singh had especially come down to Bhubaneswar to discuss the issue with the state officials.

Work on the second and third stage of expansion of the NTPC project estimated to cost about Rs 8,000 crore had run into rough weather following state government's recent decision to levy 12 per cent free power from all thermal new power projects, be it in the central or the private sector, coming up in the state. The government had argued that it be supplied with free power in lieu of the permission for use of its land and resources and also to part compensate the enormous social and environment costs it had to bear on account of the thermal projects, particularly when the state being surplus in power did not require them for its own use and the projects are meant to meet the needs of other states.

However, the state government's views were totally unacceptable to the NTPC and the union power ministry which said that such a measure would not only create a precedence but also push up the per unit cost of power for the buyer states. In fact, the union minister for energy Kumaramangalam during a recent visit to the state had threatened that if the government did not relent on its stand, then the expansion projects of NTPC would be shifted out of the state. Stating that no promoter would be interested to put up his project under such conditionalities, he had warned that the state, despite abundance of power grade coal, will be hit hard in terms of economy and employment due to relocation of projects.

Meanwhile the standoff between the state government and the Union energy ministry on the issue of levy of free power by the former is unlikely to ease off in the near future despite the exemption of NTPC projects from these conditions. According to a government spokesman, the state's stand to impose the levy remains unchanged with respect to all other projects including that of mega power complex planned by Gordon Wu company CEPA in association with Power Grid Corporation of India at Hirma near the Ib valley coalfields.