MoU ban may cost Chhattisgarh dearly

Investment proposals worth nearly Rs 3 lakh crore in Chhattisgarh have come under a cloud following a state government decision to ban inking fresh Memorandum of Understanding (MoU) for investment in the mineral-rich state. The power sector in the coal-rich Chhattisgarh would be the worst affected. More than 80 proposals to generate 40,000 Mw power were pending with the state government, a senior official with energy department told Business Standard. Now, all the proposals would be put on hold, he added.

The proposals to generate 40,000 Mw at a cost of Rs 5 crore per Mw would have induced investment of more than Rs 2 lakh crore in the power section alone.

 

With an estimated coal reserve of 35000 million tonne, Chhattisgarh along with two other states, has almost all the coal deposits in the country, which has led to its 'power hub' strategy. Chief Minister Raman Singh had been claiming that the state would become a power hub in the next seven-eight years.

The claim had been powered with the state government inking MoUs with 61 Independent Power Producers (IPPs) to produce 50,000 Mw of power. More 80 per cent of the proposals are still on papers, the official said on conditions of anonimity. State's energy secretary Aman Singh is optimistic that more than half of it will come up.

If not all, half of the companies would come up and the state would be in a position to generate 30,000 Mw, Singh said. Similarly, a number of applications are pending for investment in steel and cement sectors.

According to officials in the state's investment promotion board, about 75 proposals are pending for steel and cement plants in the state. The officials said that of the pending applications, a few big companies in the steel and cement sectors had showed interests in investing in the state. They, however, declined to name the companies.

In all, the proposals would have brought on investment of more than Rs 1 lakh crore in steel and cement sectors, the officials added.