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Rediff News  All News  » Business » 4,000-MW Krishnapatnam power project okayed

4,000-MW Krishnapatnam power project okayed

March 28, 2006 18:14 IST

The Centre has given clearance for setting up 4,000 MW-power project at Krishnapatnam in Nellore district of Andhra Pradesh.

At a press conference on Tuesday, Minister for Information & Energy Mohammed Ali Shabbir said the Central government had earlier taken a decision to sanction five mega power projects. Andhra Pradesh Chief Minister Dr Y S Rajasekhar Reddy wrote to Prime Minister Dr Manmohan Singh on March 20 requesting him for a coal-based ultra mega project at Krishnapatnam. The Prime Minister and other central ministers gave their nod for it.

A high-level team of Central Electricity Authority consisting of R K Jain (member, Thermal), S Seshadri (chief engineer), M S Puri (director) and R K Jain (additional general manager, Power Finance Corporation) visited Hyderabad on Tuesday. They had discussions with Krishnapatnam port officials and top officials of AP GENCO, AP Transco and state energy department. They expressed satisfaction over the site and infrastructure at Krishnapatnam, the minister said.

According to Jain, the ultra  mega power project will be set up in the private sector. The project cost will be Rs 14,000 crore (Rs 140 billion) to Rs 15,000 crore (Rs 150 billion). The project's basic infrastructure will be created by April 2007 and the project will be entrusted through international competitive bidding process.

The minister said out of the project's 4,000 MW capacity, 2,000 will be earmarked for Andhra Pradesh and the rest for the central grid. Imported coal will be its feedstock and the power generation cost will be Rs 1.80 per unit.

The private developer will have to set up the project and import the coal and the government will purchase the power. Competitive bidding will be done only on the pricing of power. Depending on the international fuel price index, there could be escalation in power purchase price.

The ultra mega power plants will be located in the coastal belts of Gujarat, Andhra Pradesh, Maharashtra and Karnataka and the inland areas of Orissa, Chattisgarh and Madhya Pradesh.

Jain said Andhra Pradesh will be free to invest in the equity of this project. The government will purchase power from the new plant and there would be no financial liability on the government if the power was not required by the central or the state grid.

Shabbir said the state government is setting up a 1,600-MW power project at Krishnapatnam at present. The chief minister has instructed the officials to increase the capacity to 4,000 MW. With the proposed ultra mega power project in the private sector, Krishnapatnam will have a generating capacity of 8,000 MW.

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Syed Amin Jafri in Hyderabad