Railways, NTPC tie up for 1,000 Mw thermal plant

The Cabinet Committee on Economic Affairs will shortly consider a proposal for forming a joint venture between the railways and NTPC for setting up a 1,000 Mw thermal power plant at Nabinagar in Bihar. The project, hanging fire since 2003, is expected to cost around Rs 4,800 crore.

"The railway minister has approved the proposal and a Cabinet note will shortly be send for the approval," a government official said.

A joint committee will be formed to oversee coordination between the railway and power ministries. The JV will raise Rs 3,600 crore through debt, while the balance will be financed through equity contribution.

The railways will have 51% stake in the joint venture-Bhartiya Rail Bijlee Company. "NTPC will manage and operate the plant," the official added.

NTPC will supply power to eight states-Jharkhand, West Bengal, Orissa, Chhattisgarh, Madhya Pradesh, Maharashtra, Gujarat and Bihar-from this plant. Power from here will also be used for traction purpose in states situated in the western and eastern power grid.

The approvals from the public investment board and the environment ministry had been obtained in 2004.

Earlier, NTPC had staked the claim for the management control and had also insisted that the responsibility of transporting power to load centres situated in various states be given to the railways. But the latter felt that being a majority stakeholder, it should have the control, while NTPC should be responsible for transportation.

In February 2003, a committee comprising three officials each from the railways and power ministries had decided to set up a power plant in Nabinagar, Bihar, after examining 4 sites in different states.