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The government's attempt at reviving investor interest in its flagship Ultra Mega Power Projects (UMPP) scheme after a four-year lull is headed south - quite literally. One of the two such newly-announced projects in Cheyyur village, 96 kilometre south of Chennai in Tamil Nadu, has been engulfed in a controversy spanning economic, social and ecological domains. With the National Green Tribunal last month restraining the authorities from awarding the Rs 24,200 crore project, the future hints at a long-drawn battle between the protesting local inhabitants and the project proponent, Power Finance Corporation (PFC), which arranges clearances before such projects are bid out to companies.
The preliminary work on the Cheyyur UMPP began in 2006 with teams from the Central Electricity Authority, the power ministry's technical and planning wing, conducting site visits in Cheyyur, one of the four sites identified in the state for a UMPP project. A Special Purpose Vehicle called the Coastal Tamil Nadu Power Ltd was incorporated by PFC for obtaining pre-bid clearances in 2007. The environment ministry issued the terms of references for the Environment Impact Assessment (EIA) study for the main plant and a proposed adjoining captive port for coal imports in 2009 and 2010 followed by public hearings. The ministry's Environmental Appraisal Committee (EAC) gave its go-ahead, based on the EIA report, in May this year. PFC called for bids in September. However, the green tribunal stayed the award of project in October, and is currently hearing the parties.
Conflicting reports
The National Green Tribunal order came in response to a petition filed by the locals challenging the grant of environmental clearance for the project, alleging large-scale violation of norms. The petitioner, representing largely the fishermen community, claims that the green clearance was based on false information contained in the EIA report. Several facts and information in the report do not match ground reality, he says, including the site selection process, land requirement for the project, type of land appropriated, estimate of ecological resources in the area and livelihood loss for the local community. To further expose the alleged rot, NGO Community Environmental Monitoring (CEM) came up with a report titled "Science, Non-Science and the Dubious Role of 'Experts' in Environmental Due Diligence: A Case Study of Cheyyur UMPP". The report is a scathing indictment of how rules were allegedly bent and facts overlooked to grant clearance for the project. "The Cheyyur case exposes how the procedures under the EIA Notification of 2006 are rendered meaningless by corrupt consultants, uncaring project proponents, intellectually dishonest experts and crony regulators," the report claims.
The allegations are serious. But are they valid? Email queries to the ministry of environment and forest (MoEF), the power ministry and PFC remained unanswered. However, a PFC official said the bidding process was on as the NGT order has only restrained the final award and not the bidding process.
"We are confident we are on a strong footing. We will not award the project as directed by NGT until the final hearing is over," he said.
Business Standard has reviewed the main plant's EIA report, comprehensive EIA assessment of the captive port as well as minutes of the meetings of the EAC, apart from the petitions filed by locals.
EIA for the captive port - for which National Institute of Ocean Technology was the consultant - judges the project proposal on ecological parameters and gives a thumbs-up to the project on most counts. "The evaluation ... concluded that the project is not sited in an ecologically sensitive area," the EIA states. At another place, it notes that there are no mangroves, coral reefs or critical habitats in the area of the project or its vicinity. The reality, however, say the protester and the CEM, is different. The area has tidal mudflats, seagrass beds, mangroves and sand dunes, all of which are "ecologically sensitive" under the Coastal Regulation Zone Notification of 2011.
A seagrass, Halophila ovalis, and mangroves such as Avicennia marina and Rhizophora sp are well-documented in the Yedaiyanthittu estuary, one of the two estuaries close to the project site. "Both Rhizophora and Avicennia are ecologically and economically important as they contain bio-active compounds. They also provide crucial breeding grounds for aquatic animals," says Delhi University Professor Deenabandhu Sahoo, who has 20 years of research experience in marine biosystems. He adds that heat discharged from coastal power plants will destroy marine ecology as the government normally does not take recourse to artificial reef construction to help attract new flora and fauna in the event of such damage.
The minutes of the EAC meeting of May 2013, which recommended clearance for the project, states that the number of migratory birds in the Cheyyur lagoon is negligible. However, CEM insists about consistent visits by birds, including threatened migratory waterfowl, at the Cheyyur lagoon over the past decade (1, 491 in 2008 and 22,016 in 2009). In fact, the Yedainthittu-Kalvelli Tank Complex, south of the project site, is a declared International Bird Area.
Project site relocated?
Another serious allegation being levelled against the project proposal is that the site where the plant is going to come up was never visited or considered by the Central Electricity Authority team. "The power plant and ash pond of the current site are 1 km and 6 km away from the originally visited site. The original site was in Cheyyur village of Cheyyur taluk while the current site is in Vedal village of Cheyyur taluk," the CEM report states.
The EIA report for the project states seven reasons why Cheyyur was considered as the most suitable of the four sites identified for the power plant, the biggest being "minimum use of agricultural land". However, EAC noted in its meeting on 22 April 2013, that "land requirement will be 416.45 ha, out of which 342.62 ha are agriculture land, 9.83 ha are forest land and 64 ha are Poromboke and barren government land." Therefore, the EAC's own observation places the proportion of agricultural land for the project at over 82 per cent of the total land area. So, how did EAC fail to find fault with the site despite this discrepancy and gave its go-ahead for the project?
Another alleged discrepancy lies in the captive port EIA, which says that the shoreline at Panaiyur village which will house the port is stable, even as a study by the environment ministry's National Centre for Sustainable Coastal Management identifies the coast as "moderately eroding".
So, what went wrong when the authorities decided on the environmental go-ahead for the project? According to Shweta Narayan, CEM co-ordinator and the author of its report on Cheyyur, the project proponents have misinformed the MoEF and provided false data and documents. "They have hidden critical information that would have certainly influenced decision makers. The decision makers themselves are at fault as they have accepted all this false data and information without verification," Narayan says. She claims that EAC members did not do basic due diligence regarding the facts presented to them. "It is clear in the minutes of EAC Thermal's meetings in April 2013 that severe lacunae were pointed out in the project proponent's information. But, in May 2013, without discussing any of the previous issues raised, they recommended clearance."
The ambitious UMPP scheme could hold the key to the revival of the project activity in a sluggish economy. But this seems to have run into problems even before the project could take off. With Cheyyur's fishing community not willing to relent, the stakeholders are now keenly awaiting National Green Tribunal's next hearing in the case on 17 December.
THE PROJECT
4,000 Megawatt UMPP; first with a captive port
Rs 24,200 crore estimated investment
* Part of a scheme where the Centre puts on the block large clearance-ready projects
* Location near Cheyyur village, Kancheepuram district, Tamil Nadu
Timeline
Dec 2006: CEA, PFC and state officials conduct site visits
Jan 2007: PFC incorporates special purpose vehicle Coastal Tamil Nadu Power
Sep 2007: TN energy minister gives approval to plant site
2009 & 2010: MoEF issues Terms of Reference for EIA for main plant and captive port
July 2010: Public hearing for plant site starts
Dec 2011: Public hearing for captive jetty, port and coal stocking yard begins
Aug 2012: EAC approves plant
Nov 2012: MoEF gives Coastal Regulation Zone clearance
May 2013: EAC gives thermal approval
Sep 2013: RFQ issued by PFC inviting bids
The problem
* Severe protest by locals and NGO Community Environmental Monitoring against the proposed main plant and captive port
* Protesters allege EAC approval was based on false and misplaced information in EIA report
* Petition filed by local fishermen allege the project would destroy livelihoods. National Green Tribunal stays bidding process
