Turf war imperils Jindals' project in MP

Tussle between top officials of the energy department and the department of industry has reportedly scuppered the 1,000 MW power project proposed by the B C Jindal group, promoted by Jindal India Thermal Power Ltd.

On March 11, the firm and Madhya Pradesh Trade and Facilitation Corporation Ltd, a state government undertaking, signed a memorandum of understanding, under which the former proposed to set up a 1,000 MW thermal capacity greenfield coal-based pithead thermal power project in stages in Sidhi district.

However, a government insider told Business Standard: "The firm has not been assured of coal linkage so far and as a result the proposed plant cannot take shape. Top officials of the energy department do not find the process of signing the deal appropriate without their consent."

The MoU said: "The first stage of the power plant was of 250 MW while second and third will be of 250 MW and 500 MW, respectively."

The then managing director, TRIFAC, Raghav Chandra, and Jindal Power Director Umesh Chandra Jain signed the MoU in March in New Delhi. The first phase of the project was proposed to be completed by 2009.

"There is no clue on the project, and department of energy officials were not happy with the deal," said a government insider, adding, "in the absence of an Act, it's possible for various departments to derail talks, proposals or deals on investment projects." 

According to the deal, though the investment size was not mentioned, the project was supposed to be of Rs 4,000-4,500 crore (Rs 40-45 billion).

The coal for the project was expected to be supplied by Singlrauli coalfields under Northern Coalfields Ltd, while water supply was proposed to be from the Rihand reservoir.

On the one hand, the department of industries is awaiting the feasibility report on the project the firm had sent for coal linkage and water supply.  "The firm needed 7,000 million cubic feet of water per hour," said a government source.

TRIFAC was supposed to extend promotional support in obtaining various clearances, approvals and permissions from the MP government and its agencies.

It was also expected to assist the Jindal group in extending assistance to JITPL to put up the rail line connecting the allocated mine to the project.