Neyveli, NTPC to revive Hirma plant

The power ministry has asked state-owned utilities National Thermal Power Corporation (NTPC) and Neyveli Lignite Corporation (NLC) to jointly revive the $5.3 billion Hirma power project, which was in cold storage after Reliance Power withdrew.

Both the companies had accepted the ministry's demand for executing the 3,960 Mw project, and were in the process of submitting their terms and conditions, senior officials told Business Standard. Power from the project would be sold outside the state, they said.

As per the ministry's proposal, half of the project will be executed by NTPC and the rest by NLC, each with a capacity of around 2,000 Mw. The project is expected to use about 22 million tonnes of coal from Orissa's Ib Valley.

Around three meetings have been held between the NTPC-NLC combine and the power ministry. The government has chosen to execute the project under the memorandum of understanding (MoU) route and not go in for competitive bidding.

With the Electricity Act, 2003, in place, the ministry feels that selling power from the plant will not be a problem, and the tariff will be around Rs 2.15 per unit.

The project is expected to supply electricity to six states, including Rajasthan, Madhya Pradesh, Haryana, Gujarat and Punjab. The new promoters will have to procure clearances for the project and submit their tariff proposals afresh to the Central Electricity Regulatory Commission.

The Hirma project was to be implemented jointly by the US-based Mirant Corporation and Reliance Power Ltd. Power Trading Corporation was supposed to buy the power and supply it to Rajasthan, Madhya Pradesh, Haryana, Gujarat and Punjab.