REL's project faces Rs 2,000 cr hurdle

Land acquisition for Reliance Energy's much publicised 12,000-Mw project at Hirma in Jharsuguda district of Orissa will be conditional to the company clearing the dues of Grid Corporation of Orissa (Gridco) to the tune of Rs 2,000 crore.

REL is set to sign an MoU with the Orissa government tomorrow for setting up of the first phase of its mega venture comprising 4,000 Mw generation at an investment of Rs 16,236 crore.

Besides REL, 10 other companies will sign MoUs with the government envisaging creation of 15,920 Mw generation capacity at a combined investment of Rs 63,245 crore.

The Orissa government has raised a claim of over Rs 2,000 crore on three REL-owned power distribution firms towards default in payment of bulk electric supply dues to the state-owned Gridco.

REL would be asked to clear the dues before the land acquisition process for its Hirma project began, said Chief Minister Naveen Patnaik.

The settlement of Gridco dues would be reflected in the MoU with REL, pointed out state Energy Minister SN Patra.

When the chairman of Reliance-Anil Dhirubhai Ambani Group (R-ADAG), Anil Ambani, had visited Orissa in July last, a joint communiqué had been issued for setting up 12,000 Mw coal-fired power plant, the largest single location thermal power plant anywhere in the world, at Hirma in Jharsuguda district of Orissa, at an investment of Rs 50,000 crore.

At that time, both Chief Minister Naveen Patnaik and Anil Ambani had informed the media that a joint task force would be set up soon, with representatives from REL and the government, to resolve the dispute over REL companies' payment default. However, the task force has not been set up yet.