NTPC inks pact with GPC, GEB for 2,000 MW Pipavav project

National Thermal Power Corporation (NTPC), Gujarat Power Corporation Ltd (GPCL) and the Gujarat Electricity Board (GEB) signed a memorandum of understanding (MoU) on Friday for a 2,000 MW power project to be set up at Pipavav in Amreli dristrict of Saurashtra.

A joint venture company with an initial investment of Rs 6,000 crore will be formed in a month with NTPC pumping in 50 per cent of the funds, and the Gujarat government and its associates taking up the remaining stake.

Minister of state for energy, Saurabh Dalal, said a quick analysis will be done on whether to use imported coal or gas, after which other details will be worked out.

"More importantly, this project will reduce our technical losses and will solve the low voltage problem, as there is not big power plant in the entire Saurashtra," Dalal said.

At present, power produced in cental and south Gujarat is transmitted to Saurashtra, which causes technical losses and a low voltage. The new power plant is expected to balance the situation to a large extent, the minister said. "NTPC will be the major partner in this project," he added.

Officials of the three companies signed the MoU in the presence of chief minister Narendra Modi.

The agreement has been signed after getting a clearance from the prime minister Atal Bihari Vajpayee after a meeting with Modi. It had been a long-standing demand of the state government to set up a power plant at Pipavav. The prime minister has sought a 50,000 mw capacity increase of electricity in the country.

Officials said the proposed power project will be completed in two stages with 1,000 mw capacity in each stage. A sum of Rs 3,000 crore will be spent on the project in the first phase and an equal amount will be spent in the second phase. Modi said he was confident that the project will come up at the earliest.

NTPC chairman and managing director C P Jain said apart from production of electricity, the company was also interested in joint distribution.

Accepting the proposal, the chief minister said that the state government has formulated the Special Economic Zone (SEZ) Act and the is set to have five such zones.

Setting up a electricity project in a SEZ will help the producers gain the benefits of functioning from a SEZ, the chief minister said, and added that NTPC should avail of this opportunity."Power projects set up in a SEZ will be exempted from import duty and the promoters will also have special concessions in the labour laws."

Modi added that the power projects will also benefit in terms of fuel as the state government was laying a gas grid with which importing fuel will become easier through the ports.

Jain said NTPC's power plants currently provide 1485 mw of power to Gujarat of the total 20,000 mw produced in the country. He added that the state will get an an additional 2,740 mw with the completion of this project.