“The project is stuck. Ideally, it should have started construction by now. We are going to take a decision on it in the next six months,” a senior state government official told Business Standard on condition of anonymity, adding it was being treated as a "null" project. He said the project was yet to be formally handed back to the state government.
Chhattisgarh has around 18 power projects, under development but the state does not count the Indiabulls project among these.
Five years ago, the Bhaiyathan project was auctioned with a unique model and had been quoting one of the lowest rates in the country. The project was won by Indiabulls for a competitive rate of 81 paise per unit. This, however, was only for 65 per cent of the power of the project, to be supplied to the state discoms.
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The remaining 35 per cent was allowed to be sold in the open market at prices decided by the company.
The windfall gain then was that this project came with captive blocks in Gidhmuri and Paturia villages in the coal-rich Korba district. The captive coal blocks are estimated to have reserves of around 350 million tonnes. These mines, however, could not receive forest clearance and the project has been stuck since.
At the time, many experts had applauded this model, which would ensure cheap power to the state, while letting the companies gain from its merchant power sales. The model, expected to be followed by many other states, got stuck for several reasons, including a drastic fall in merchant power prices.
Indiabulls Power did not respond to an e-mail sent a week back about the development.
Indiabulls is a part of the larger real estate and financial services group. It has two more power plants under construction, at Nashik and Amravati in Maharashtra, which have a capacity of 1,350 Mw each. The boilers of these power plants were lit three months ago. The company had earlier said the work on beginning commercial operations would commence in March 2013.
The Nashik and Amravati projects have planned expansions as well, taking these to 2,700 Mw each. In its recent results update, the company said that it had 5,400 Mw of capacity under execution, taking into account these two projects.
The company posted a net loss of Rs 33.7 crore for the nine months ended December 2012.