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RPower terminates Tilaiya power plant

Land not yet made available, causing delay, firm alleges.

By: ENS Economic Bureau | New Delhi |
April 29, 2015 2:46:09 am
reliance power, reliance power plant, krishnapatnam power project, reliance, business news, economy news, indian express news, indian express Reliance Power had stopped work at its Krishnapatnam Ultra Mega Power Project, citing a hike in the cost of Indonesian coal that the project is to run on.

Reliance Power (RPower) announced on Tuesday that its wholly-owned subsidiary, Jharkhand Integrated Power Limited (JIPL), has terminated the power purchase agreement (PPA) of its 3,960 MW Tilaiya ultra mega power project (UMPP) in Hazaribagh district of Jharkhand.

Earlier, in June 2011, Reliance Power had stopped work at its Krishnapatnam Ultra Mega Power Project, citing a hike in the cost of Indonesian coal that the project is to run on.

Reliance Power was awarded the Tilaiya UMPP in February 2009. JIPL, the special purpose vehicle (SPV) for implementing the project, was handed over to Reliance Power by PFC in August 2009. For fuel security, the project was allocated the Kerendari BC captive coal mine block. JIPL had signed a PPA with 18 utilities in 10 states.

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According to a company press release, the PPA required procurers to hand over the possession of the land for the power station and water intake pipeline by February 2010. Other development period obligations included issuance of notice under Section 9 of the Land Acquisition Act in respect of land for coal mines and fuel transportation systems. Besides, site clearance was required from the ministry of environment and forests (MOEF) for the coal mines.

“However, the required land is yet to be made available. Even the forest land in the power station area, for which the Stage-II Forest Clearance was accorded by the central government way back in November 2010, has not been handed over to JIPL till now. As regards the coal block, the land acquisition process is yet to get initiated, for which the application was submitted way back in February 2009,” the company said.

The company said that in spite of more than 25 review meetings and extensive and continuous follow-ups with the Jharkhand government over the last five-and-a-half years, the required land was yet to be made available. Based on the present estimates of the land handover process, it is estimated that the project cannot be completed before 2023-24, the company claimed.

On April 28, 2015, RPower closed at Rs 58.25, up Rs 2.45, or 4.39 percent. The 52-week high of the share was Rs 113.20.

Plant in Jharkhand

* Reliance Power was awarded the Tilaiya UMPP in Feb 2009. JIPL, the SPV for implementing the project, was handed over to RPower by PFC in August 2009.

* Earlier, in June 2011, RPower had stopped work at its Krishnapatnam UMPP, citing a hike in Indonesian coal cost that the project was to run on.

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