Maharashtra powerless over land acquisition

Private power companies are backing out of MoUs with the state, citing several contentious issues. The government, however, says all this will be resolved by 2011, Neeta Kolhatkar reports

In 2005, the Government of Maharashtra signed eight Memoranda of Understanding (MoUs) with private companies to generate 12,500 mega watts (MW) of power for the state. Today, the total capacity has been reduced to 6,500MW and only three companies have agreed to honour their MoU with the state.

The private firms complain that state government officials have not helped them in acquiring land, making water available and fixing prices, all which can be passed on to the consumer. “The two main issues that affect our working with the government are the Power Purchase Agreement (PPA) and the land acquisition issue. The PPA decides the price of electricity at which our company will sell to the state grip, and eventually the final price a consumer will have to pay,” said an official of a private company that recently pulled out of an MoU.

Among the remaining companies, the Tata Power Company will generate 1,600MW, Reliance Energy will generate 4,000MW and JSW Energy Limited will generate 1,000MW. Even among these two projects, the Tata and the Reliance one were involved in a tussle over land in Shahapur taluka, Thane district. Reliance Energy wanted 3,000 acres while TPC wanted around 1,000 acres. A few hundred acres of their land overlapped, and both moved court.

Most private companies who tried to partner with the government have been miffed over things like this. They say these kind of problems can be avoided if the state government helps them acquire land for projects. “Our company is actively pursuing setting up a mega power project in coastal Maharashtra and is in discussions with the state government for getting assistance in land acquisition,” a TPC official said.

Delay in taking decisions also means delay in starting projects and, eventually, an escalation in costs. According to a Reliance Energy official, “We wish the government would act fast and help us set up the project.”

Experts say however, that states like Chattisgarh, Gujarat and Andhra Pradesh are going all out to woo private players in power, even those from Maharashtra, to make sure the plants are set up. Maharashtra needs to treat these projects with as much priority as the Centre did for the ultra-megawatt projects, and try to resolve the problems faced by the private companies. “There are merits on both sides. Most governments are wooing the private sector, and the Maharashtra government must realise that it doesn’t have that advantage of easy availability of coal or fuel,” says P Ramesh, MD, Feedback Ventures. “The private sector needs help in acquiring land, water and fuel linkages. If they are not helped, they won’t come to this state.”

However, the power ministry says that first, the MoU clearly states that acquiring land is the responsibility of the private company. The main issue, state officials say, is that of paying the market price to the landholders. “Private companies want to purchase land at lower prices. The government’s policy is clear that the private company has to acquire the land and it will not force a farmer to give up his land,” says Sudhakar Reddy, member of the environmental clearance committee. The other problem, officials say, is that private companies want to acquire large tracts of land from the start, keeping in mind later expansion. “These companies want huge amounts of land and state in their proposal, that this is for the expansion of their projects,” says Reddy.

According to power minister Dilip Walse-Patil, the power problems of the state will be resolved by 2011, when the state can overcome its power shortage. “By 2011-12, Maharashtra will have enough power to meet the shortage even at that time, which we expect to rise from 5,000MW to 10,000MW. These demands will be met.” He added, “I don’t think private companies are running away from Maharashtra. In the current scenario, a power company can set up a project in another state and still sell the power to us, as we are now on the national grid.”

Now the state government has signed three new projects. KSK Energy Ventures is setting up a 540-MW, coal-based power project, with an investment of Rs2,400 crore at Warora in Chandrapur; the Adani Group’s project will build a 1,980MW plant, while Emco is planning to build a 540MW thermal power plant near Nagpur.
k_neeta@dnaindia.net