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Rediff News  All News  » Business » AP's power project trips on red tape

AP's power project trips on red tape

February 21, 2007 13:51 IST
The 4,000 MW Krishnapatnam ultra mega power project in Andhra Pradesh seems to be stuck, thanks to the state government's inability in resolving and expediting issues related to the project.

The UMPP was to be awarded by end of April. However, the state government is yet to decide on issues like port handling charges, permission for use of sea water, land acquisition and development of infrastructure for the project.

Andhra Pradesh will be a major beneficiary from this UMPP, as the state would get 1,600 MW of total 4,000 MW generated. The special purpose vehicle for Krishnapatnam is the Coastal Andhra Power Limited, a subsidiary of Power Finance Corporation.

The SPV has identified a number of problems that need to be resolved before the UMPP gets a go-ahead. For one, the coastal project will require imported 12-14-Million-Metric-Tonnes coal annually, which in turn, requires excellent port services.

The Krishnapatnam Port Company Limited is in the process of developing the existing minor port into a deep water port on Build-Operate-Streamline-Transfer basis.

However, there was a huge variation of Rs 61.35 in port handling charges given by KPCL, to what was proposed by CAPL. The CAPL port handling charges are based on rates set for Mundra, the coastal UMPP in Gujarat awarded to Tata Power in December.

The Centre has asked the Andhra Pradesh government to settle vexed issue of handling charges at the earliest.

The CAPL had also asked for 'in-principle' clearance for the use of sea water for the power project, but is yet to be granted permission.

Land acquisition is another issue that was highlighted by the SPV. The Nellore district magistrate was requested to allow land for the proposed power plant and ash dyke, but such a permission is far from being granted.

Further, on the proposals for the four-laning of a road and rail link between Venkatachalam and Krishnapatanam port, the Centre has asked the Andhra government to ensure the proposals are expedited at the earliest.

The CAPL's request for a no-objection certificate from the principal chief conservator of forests, Hyderabad is yet to be granted.

Sapna Dogra in New Delhi