Essar power plant in MP

1,000 Mw thermal power plant gets govt nod

The Madhya Pradesh government is learnt to have forwarded a proposal of the Essar group on setting up a power project in Madhya Pradesh, to the Centre.

Sources at the state secretariat, the department of industry and the chief minister's office say the state government has "put the Hindalco (Aditya Birla group) proposal of a Rs 7,700-crore smelter plant investment plan on hold and has cleared the Essar group's proposal to set up a 1,000 MW thermal power plant."

Essar has proposed to set up the plant in eastern Madhya Pradesh, the district of Sidhi being the likeliest candidate.

Hindalco had proposed to set up its integrated smelter and captive power plant of 600 MW in Devra gram of the Sidhi district.

"Power is the state government's top priority, cement next, and then aluminum. Since Essar has informally agreed to complete the project at the earliest, the government has forwarded the proposal to the Centre since it requires permission of the ministry of coal and mines," an official source said.

Chief Minister Babulal Gaur had recently in an informal talk with reporters said the Essar proposal was under consideration since the firm had assured him in Mumbai to start a power plant.

The state government has also undertaken a project of Jai Prakash Associates (JP Group) for a power project with an investment of Rs 5,000 crore. JP is said to be planning investment in cement. An email to the Essar group evoked no response.

"In the case of the AB Birla group and the JP proposal, the companies are interested in setting up power plants but they will utilise it for their own needs, and the surplus power will be supplied to the state. Essar is likely to generate and distribute power to the state," said a government officer.

The coalfields of Madhya Pradesh produce only 80 million tonnes, as against the demand of 98 million tonnes. Coal India Ltd has identified 12 blocks, having a cumulative reserve of 2,585 million tonnes, where private entrepreneurs can mine. Moreover, Sidhi's coal is one of the finest varieties in India.