Unable to find a suitable location to set up its second aluminium and power complex in the state, National Aluminium Company (NALCO), a Navratna Public Sector Undertaking (PSU) under the Ministry of Mines, is mulling to shift the Rs 16,000 crore project out of Orissa.
“The company was pursuing a plan to set up another smelter and power project in Orissa. But considering the uncertainty on the location in the Orissa project, the company may have to explore for an alternate location elsewhere in India,” BL Bagra, chairman cum managing director (CMD), Nalco told shareholders at the company AGM here on Thursday.
He said, key to the selection of an alternate location will be availability of water, coal and bauxite in the vicinity of the project site.
He rued, in Orissa, least priority is being given to the industries in allocating water linkage.
As a part of its expansion plan, Nalco had initially decided to set up its second aluminium and power complex, after the existing one at Angul, at Jharsuguda at an investment of Rs 16,000 crore. The project comprised of establishment of a 0.5 million tonnes per annum aluminium smelter and a 1,260 Mw captive power plant (CPP).
However, Nalco was crowded out of the location as a number of private players like Vedanta, Hindalco and L & T have their projects lined up in and around Jharsuguda. A carrying capacity study conducted by the Nagpur based National Environment Engineering Research Institute (NEERI) had capped the aluminium capacity for Jharsuguda belt at two million tonne per annum. With the proposed combined capacities of Vedanta, Hindalco and L & T projects topping that figure, Nalco was asked to look for alternate locations in the state.
Following this, Nalco was scouting for an alternate location in neighboring districts of Sundergarh, Sambalpur and Bolangir, but has been unable to find one with viable logistical support to access required amount of coal and water.
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“Major issues in alternate locations were access to water and coal sources. Distance from the coal mine, lack of rail infrastructure to haul coal to the project site and reluctance of the government to allocate adequate water to the project were main hindrances in finding an alternate location,” Bagra told Business Standard.
He said, the company has already waited for three years to start work on its second aluminium cum power complex and has to take a call on the matter soon. Bagra said, the company has not yet started looking for alternate location outside Orissa as it is still exploring its last option to set up the project within the state. As per this option, the company has agreed to scale down the capacity of the project as per the availability of water in a location, which should be preferably in the vicinity of coal mines. A consultant has appointed to select the site and work out the revised details. The final decision will be taken after the filing of report by the consultant.