The project cost of NTPC’s Solapur thermal power plant, estimated at ₹12,000 crore, could increase by ₹500 crore, due to additional compensation sought by the project-affected families. It could result in a hike in the power tariff for consumers in five States, where the company has entered into a long-term power purchase agreement.
Back-of-the-envelope calculations suggest that power tariff could increase between 5 and 10 paise for all consumers in the five States. Power purchase agreements have been signed with electricity distribution companies in Maharashtra, Tamil Nadu, Jharkhand, Madhya Pradesh and Goa. Out of the total available power, Maharashtra will get 55 per cent.
On Tuesday, during the State Rehabilitation Authority meeting, Maharashtra Government agreed to the demands for additional compensation. But NTPC is no mood to accept the demands.
In a letter to the Secretary (Relief and Rehabilitation) of Maharashtra Government, the company said power cost from the plant is already very high and additional financial burden will make the plant unviable.
The letter, seen by BusinessLine , has also pointed that such decisions have far reaching implications not only on the Solapur project but on other projects being implemented by NTPC.
Between 2009 and 2011, NTPC acquired 1,893 acres of land at Fatatewadi, Hotgi and Aherwadi village near Solapur. It plans to put a 1320 MW thermal coal power plant for which construction work is underway.
A senior Maharashtra Government official told BusinessLine that ₹350 crore has already been spent by NTPC on compensating and rehabilitating the 450 families, which have been affected by the project,
Depending on the fertility of the land the families have already received monetary compensation between ₹3 and 6 lakh an acre, while the prevailing market rate was ₹40,000-75,000 an acre, the official said.
The official added that families have been rehabilitated according to the norms of National Rehabilitation and Resettlement Policy and Maharashtra Project Affected Persons Rehabilitation Act. Each of the family members have also received ₹2 lakh as fixed deposit in the bank. An NTPC official, on condition of anonymity, said the process of land acquisition was done under the old land acquisition Act.
But there were no forcible acquisitions and the land was taken only after consent from the owners. Project-affected persons had even signed a full and final settlement in 2011 but were now demanding ₹40 lakh an acre as compensation due to political instigation, the official alleged.
Maharashtra’s Minister for Relief and Rehabilitation Patangrao Kadam was not available for comment.