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The Odisha government has stalled the process of land acquisition for a 2250 Mw coal-fired power plant proposed by Nava Bharat Power Ltd amid ongoing probe by the Central Bureau of Investigation (CBI).
The Central investigative agency is probing into alleged profiteering by Nava Bharat Power that had sold 100 per cent of its shares to Essar Power soon after being allocated the Rampia and Rampia dip side coal blocks for its power plant proposed at Meramundali near Angul.Nava Bharat Power reportedly made a profit of Rs 200 crore from the deal. The Opposition had questioned the state government's basis for recommending the coal block in favour of Nava Bharat Power in 2007.
"We have held up the process of land acquisition for Nava Bharat since the case is under CBI lens. The government is also holding consultation with the law department on the course of action to be taken on stake sale by Nava Bharat Power to Essar Power since the government was kept in the dark on the deal”, said an official source.
Following its takeover of Nava Bharat Power, Essar Power had made a fresh requisition for land acquisition.
No land has been acquired yet for the power project. Though notification under Section 6 (1) of Land Acquisition Act was issued, it had lapsed. Moreover, the memorandum of understanding (MoU) signed with the Nava Bharat Power had expired since June 2009. The proposed 2,250-Mw coal-fired plant at Meramundali requires 1,200 acres and 5,057 million tonnes of coal every year.
In the original MoU, Nava Bharat had committed to start the first unit of the project comprising 525 Mw output by January 2014.
Essar Power said it had invested over Rs 500 crore on the power project in addition to the acquisition cost of Rs 230 crore.
“Essar Power has invested more than Rs 500 crore in developing the project and has also achieved financial closure, with ICICI Bank having underwritten debt financing of more than Rs 3,720 crore,” the Ruias-controlled firm said in a statement on September 5 last year, when the CBI filed an FIR against Nava Bharat.
