J&K Creating another JV with NTPC

KL Report


J&K’s wholly owned State Power Development Corporation (SPDC) is inking another Joint Venture with NTPC for using the allocated coal mine in Odisha for setting up a thermal power plant. State law ministry has already approved the draft agreement of the JV in which NTPC will hold 67 percent and SPDC 33 percent stakes the government informed the state legislature on Friday.

SPDC was allocated coal block at Kundnali Lubri in Odisha along with NTPC with a geological reserve of 130 and 266 million tones, respectively. Under the system in place, the allocation letter will be issued once the two organizations create a JV.

SPDC engaged M/S SBICAPS as sensitivity analyst to advice on the follow up. It suggested that with a coal availability of 3.40 million tons per annum (assuming the extractable coal reserves would be 60-70% of geological reserve of 130 metric tines f9r 25 years), the installed capacity of the proposed project would be 660 MW. However, driving the coal to J&K for use in a thermal plant would entail investing Rs 700 crore a year which means a total of Rs 18000 crore would go into getting the coal home. Instead, the project requires to be set up in Odisha only.

It was on basis of this report that the government on June 20, 2014 decided to get into a JV with NTPC. The draft agreement is ready but the formal agreement is yet to take off.

In a separate intervention, the state power ministry said the SPDC has already approved renovating and up-rating the 2-MW Karnah Hydel project to 12 MW. The DPR for the project is in advanced stage.

Against an identified potential of 16475 MW hydropower J&K has so far harnessed 2813.46 MW. While centrally owned NHPC has harnessed 2009 MWs through its seven projects, state owned SPDC has installed capacity of 761.96 MW in its 21 small projects. There are four mini-projects in private sector harnessing 42.50 MW.


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