Fate of NTPC project hangs in balance

State government sits idle on corporation's power distribution prayer

Seven months after National Thermal Power Corporation (NTPC) signed a memorandum of understanding (MoU) with two state government enterprises, Gujarat Power Corporation Ltd (GPCL) and Gujarat Electricity Board (GEB), the fate of the proposed 2000 MW mega power project at Pipavav in Amreili district hangs in balance. Till now, a joint-venture company has not been formed for the project.

Senior NTPC officials shied away from responding to the questions on the future of the MoU, which was signed amid much-hype.

With Corporation not showing much interest to pursue the Pipavav project, the State government and the Department of Energy and Power have not shown any interest in taking a decision on the NTPC proposal to allow the Corporation to operate as a power distribution entity in the state.

The fate of another project, the 1000 MW project at Ennore to be set up along with Tamil Nadu Electricity Board (TNEB), also is not mentioned in its Tenth Plan. Only the first phase of the Ennore project, setting up of the 500 MW plant, is only mentioned in the Corporation's target during five years of the Eleventh Plan while a joint venture company, NTPC Tamil Nadu Energy Company Ltd (NTECL) was formed way back in May 25, 2003.

NTECL is equally held by NTPC and TNEB. The Corporation had also decided go in for a similar venture with GEB and GPCL for the Pipavav project. But state government officials are doubtful if the venture would ever see light of the day.

"Since the change of guard in the Centre, attitude of NTPC towards the Pipavav project has been changed as the MoU was signed during the NDA regime. We are not sure when the joint venture entity will be formed. We just want to remind the Corporation that it was a project conceived by them. We subsequently supported the project and even offered to share stakes in such a huge project," said a senior IAS officer in state secretariat, requesting anonymity.

Minister of State for Energy, Saurabh Dalal admitted that there was no much progress since signing the MoU.

"There is not even much communication between NTPC and state government about this project while we earlier thought of forming the new joint venture company, before end of this year. Definitely, the project is being delayed by at least six months and I have learned that the project does not have a mention even in NTPC's next two plans. That is unfortunate," Dalal told Business Standard.

A K Singhal, executive director, NTPC, said, "We are yet to form the JV and I can't talk about it any further. However, various studies are presently going on for setting up a 500 MW plant for the 1000 MW Ennore project while rest 500 MW will be setup in 12th Plan."

The red herring prospectus files with the Sebi, mentions that the Corporation proposes to convert Pipavav Power Development Company Ltd into a joint venture company and have entered into an agreement. But it also does not talk any further about fate of the project.

About power distribution license, Singhal said, "Our application is still lying with state Government. But the state power minister said that proposal was state's priority.