Mineral rich Orissa which has 27 per cent of India's coal reserve and has attracted large number of proposals for setting up of Independent Power Plants (IPPs) and power plants based on coal washery rejects, has now demanded its pound of flesh from the Centre to ensure that the state is benefited in a significant way from these projects.
Concerned over the nominal advantage accrued to the host state due to the implementation of these projects, the Orissa government has urged the Centre to allocate 25 per cent free power from IPPS and 33 per cent free power from power plants based on coal washery rejects.
Chief Minister Naveen Patnaik has sought the intervention of Prime Minister Manmohan Singh and Union minister for power Sushil Kumar Shinde for allocation of free power. Patnaik has argued that the Centre needs to come out with a policy initiative which benefits the coal bearing states in line with the National Hydro Policy.
According to this policy, the host state gets 12 per cent free power while one per cent free power is set aside for people of peripheral areas affected by the project.
Other coal bearing states like Jharkhand and Chhattisgarh are also planning to make similar demand from the Centre, said a source familiar with the development.
The Orissa government has pointed out that while states consuming the power and coal from the host state get benefited out of low cost of power and coal, the host state gets a nominal advantage of limited employment opportunity and also a very low royalty on coal.
Both coal mining and power generation being in the manufacturing sector, hardly any ancillary industry gets developed around these activities.
The above situation leads to an inequitable sharing of cost and benefits from coal mining and power generation.
The host state also suffers from severe adverse impacts, which includes huge quantum of land acquisition and consequential displacement and rehabilitation of the locals, mostly tribals.
In addition to this, these projects lead to progressive depletion in forest cover posing a threat to preservation of flora and fauna, great risk of environment pollution, strain on water resources, over utilization of the state's existing infrastructure and other resources like roads and railways, unfilled mine voids and un-reclaimed land.
The losses to the host state because of the execution of coal mining and power generation projects far outweigh the gains that accrue to the state and this necessitates the doling of adequate incentives to the coal bearing states.
It may be noted that Orissa has signed MoUs (Memoranda of Understanding) with 27 IPPs with a cumulative generation capacity of 32,420 MW. Besides Mahaguj Collieries Ltd, a joint venture between the state owned power generation companies of Maharashtra and Gujarat, has proposed to set up a 2500 MW (10x250) power plant near Angul based on coal washery rejects.
Worried over the raging issues of land acquisition, environmental pollution and ash management due to the power generation projects, the state government has pointed out that much of the state's administrative resource is getting spent in facilitating development of these projects. Much of the coal is getting transported out of Orissa and a major part of power to be generated from these power plants would also be sold out of the state.
