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Neyveli Lignite to go alone on Gujarat power project
Integrated mining-cum-power producer
Neyveli Lignite Corporation Ltd (NLC) is planning to go solo
with its power project in Gujarat, scrapping its earlier
agreement with Gujarat Power Corporation, a top company
official said Friday.
"We are planning to put up a 500 MW power project in Gujarat
on our own," NLC chairman and managing firector A.R.Ansari
told reporters here.
NLC and Gujarat Power Corporation signed a deal in 2006 to set
up an integrated project in Valia in Gujarat. As per the deal,
NLC would hold 74 percent stake in the project and the Gujarat
Power Corporation the rest.
Am agreement for mining
12 million tonnes of lignite per annum was signed, and a
1,500-MW power project was proposed to be set up in two
The first phase proposed to mine eight million tonnes of
lignite and build a 1,000-MW power plant.
The project hit the block as the Gujarat government wanted the
entire power generated for itself, which the central
government refused. Any joint venture with a state-run power
company requires 57 percent of the electricity generated to be
supplied to the national grid.
According to Ansari, at the most, a state can get 75 per cent
of the power generated.
There are, however, some exceptions to the rule. For example,
in Andhra Pradesh, the entire 1,000 MW of power generated by
the National Thermal Power Corporation's Simhadri project is
supplied to the state.
In Rajasthan, the entire 250 MW of power generated by an NLC
unit is supplied to the state.
Meanwhile, NLC's plans of expanding outside Tamil Nadu with
power projects in Madhya Pradesh and Orissa hit a road block
forcing the company to drop its plans.
"We have dropped our plans in Madhya Pradesh and Orissa,"
According to him, the Orissa government wanted the power
company to pay five paise for every unit that was exported.
NLC had earlier announced its plans to set up 2,000 MW power
project in Orissa. The company had announced a three way joint
venture with Mahanadi Coal Fields Ltd and Hindalco as the
On dropping the 1,000 MW power project in Madhya Pradesh,
Ansari said Nothern Coal Fields Ltd, the proposed joint
venture partner, decided against the project as it found the
returns were lower than from mining operations.