Delay increases cost of MP power project

Slow progress has increased the cost of the Sanjay Gandhi Thermal Power station project at Birsinghpur in Madhya Pradesh. The work on the 500-Mw project, being completed by the Bharat Heavy Electricals Ltd (Bhel), is behind schedule.

"State government has raised its share capital from Rs 590.14 crore to Rs 610.92 crore since the project cost has been increased from Rs 2,093.75 crore to Rs 2,300 crore," a government spokesperson said adding, "the additional share capital will Rs 22.77crore."

With this additional share capital the loan amount for the project from Power Finance Corporation, which has already sanctioned a loan amount of Rs 1,560 crore, will be Rs 1,675 crore.

The thermal power project was slated to be commissioned and started production this year. However there is an inordinate delay in the project. The State Power Minister Kailash Vijayvergiya had recently held Bhel responsible for the one-year delay in the two power projects.

Madhya Pradesh Power Generation Company Ltd, a division of MPSEB had awarded the 500-Mw Sanjay Gandhi Thermal Power Station (Birsinghpur) and 210-Mw Amarkantak Thermal Power projects for expansion on turn key basis in 2003 and 2004, respectively.

Bhel has reportedly also delayed some work orders in balance of plants, and supply in important material of various units; Minister for Power Kailash Vijayavergiya had informed state assembly in a written reply.

The minister said Bhel had started the Amarkantak project late. The company delayed supply of materials, did not issue orders of 'balance of plant' packages, and did not make the drawings of 'balance of plant' packages for the project.

The Sanjay Gandhi project, which was slated to be operational in September 2006 has not been started so far. Another thermal power project namely Amarkantak Thermal power project is behind schedule.

During 2004-05, thermal power generation of the state has gone down by 1019 million units as compared to the power generation of the year 2002-03 since the age-old thermal power stations frequently develop technical snag. The combined production capacity of thermal power stations stands at 1,500 Mw.