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SUDHEER PALSINGH

New Delhi, 18 December

W

hen former prime minister AtalBihari Vajpayee laid the founda-

tion stone of NTPCs 1,980-MwKaranpura power project in Bihar in 1999,he had asked opposition parties not topoliticise issues related to Indias devel-opment. Over a decade later, in Augustlast year, the then-power minister, SushilKumar Shinde, informed a ministerialpanel on developmental issues surround-ing projects that shifting the site, as pro-posed by the coal ministry to get the proj-ect going, was not feasible, as it hasbecome a political issue because thefoundation stone was laid by a formerprime minister of the NationalDemocratic Alliance government.

The coal ministry last week floated asecond Cabinet note on the matter aftermultiple attempts to resolve the con-tentious issue over the location of the proj-ect had failed. The issue has raised ques-tions over the efficacy of developmentalplanning in the country. It has alreadygiven rise to massive inter-ministerialbickering between the coal and the pow-er ministries and their flagship compa-nies, Coal India and NTPC, respectively.

The controversy erupted when the coalministry woke up in 2003, 15 years after theproject site was first discussed in May 1988,and revealed that the site in the Chatradistrict in Jharkhand has an unbelievablesix billion tonne (BT) of high-quality coalreserves. For comparison, this is roughly atenth of the total 62 BT coal reserves heldby Coal India, the worlds largest coal min-

er. The ministry objected to setting u p theproject as the proposed power plant wouldsterilise the massive reserves.

The proposal was to build a powerplant, a water reservoir by creation of adam for the plant, other infrastructurefacilities and a township. The ministryfears construction of the dam will restrict

the operation of the Amrapali and othercoal blocks around the area. The waterreservoir will be a potential threat forinundation by flash floods of the nearbyPiparwar and Magadh mines of Coal India which are expected to yield 40 milliontonnes (MT) of coal every year as thecatchment will be at a higher elevationthan the mines. The heavy blasting innearby mines could destabilise the dam inthe future. The dam would also submergean area of 16 square kilometers, a bulk ofwhich is forest land, apart from engulfingseven villages.

The power evacuation corridor willhamper the operation of the large capac-ity draglines in the nearby mines. Theministry also fears that a large number ofprivate dwellings and ancillary business-es would develop around the power plant,which would further sterilise the reserves.The proposed location of the NorthKaranpura Super Thermal Power Plantneeds to be reviewed irrespective of theefforts and money spent by NTPC or theJharkhand government, when comparedwith the value and quantity of coal thatwill get sterilised, when it is alreadyknown that our coal resources are limitedand need to be properly conserved, a sen-ior coal ministry official says.

Unyielding stand

But, the power ministry and NTPC refuseto budge. They reject the reserve sterili-

sation argument, pointing out that thefirst coal seam under the project site islocated below a depth of 300 metres. No

mining in this country happens below200 metres at present. So, where is thequestion of reserves being lost? Thesereserves are out of reach, a senior NTPCofficial says. To add to the problem, NTPChas already invested around ~150 crore inthe project, has got the necessary greenclearances and has acquired land.Relocating the plant would throw back itsefforts for development by three to fouryears, the company says.

While the coal ministry argues it hadnever given approval for the original loca-tion, as a way out of the log jam, it has pro-posed shifting the site to a new non-coalbearing location 15 Km north-east ofChatra. It has also proposed increasingthe project capacity to 4,000 Mw as the

new location is scantily inhabited.Besides, the ministry has proposed devel-oping the project as a joint venture

between NTPC and Coal India where thecoal miner would facilitate land acquisi-tion and help secure statutory clearances.According to the new plan, Coal Indiacould take over the land already acquired

by NTPC at the original location and reim-burse its expenditure.

NTPC, however, does not agree. Gettingenvironmental and forest clearances andland acquisition are going to be very difficultin future. As a compromise, we had agreedto bring down the size of the project to 1,000Mw at the original location. But, the coalministry does not agree, the NTPC officialsays. Reducing the project size was a rec-ommendation of the B K Chaturvedi com-mittee set up to look into the matter by aministerial panel last year. With the twosides having failed to reach consensus onthat suggestion, the matter is now beingreferred to the Cabinet again. This time, thecoal ministry has sought to strengthen itscase for relocation by drawing attention tothe huge coal shortage in the country.Indias coal imports, currently at 90 MTannually, are set to touch200 MT by 2017 leadingto a foreign exchangeoutgo of ~72,000 croreover the next five years.The ministry has alsoused the Chaturvedicommittees favourablerecommendation of relo-

cation in support of its argument.

Overlooked reserves

But, what led the planners to overlook thehuge reserve base under the original site

and the collateral environmental andsocial damage of the proposed plant whilecharting out its development plan? Whenthe project location was first discussed in1988, minimal geological data, based on asingle borehole, was available and the

issue remained dormant for the next 15years. The site had received an in-prin-ciple approval during a meeting betweenNTPC and Coal India then. However, thesites for ash dumping, transmission cor-

ridor, township and other facilities wereleft undecided. The coal ministrys tech-nical exploration arm, the Central MinePlanning and Design Institute (CMPDI),had remained non-committal about thelocation of the dam site.

The environment ministry had reject-ed the proposed location in 2001, twoyears after Vajpayee laid the foundationstone, in view of the adverse impact on thenearby protected forest area. In May 2003,CMPDI and Coal India informed NTPCthat the project site houses coal reserves.According to the coal ministry, NTPC hadagreed to shift the plant site in a meetingin July 2003. While this was to be followedup with site-specific investigations, NTPCdid not proceed along these lines, the min-istry says. Besides, the coal demand andavailability scene had deteriorated dras-tically by 2005, making coal reserves apriced possession.

Experts say the Karanpura disputehighlights the failure of planning andcoordination at the highest levels. A deci-sion on the matter should have been tak-en long ago by the coal and the powerministries, keeping the economics of theproject in mind to decide whether the siteis best suited for mining or power gener-ation. It is unfortunate that the two min-istries have failed to resolve the issue,Amrit Pandurrangi, senior director,Deloitte Touche Tohmatsu, says. He sug-gests that a committee of independent

experts be formed to propose a solutionwhich should be binding on stakeholdersinvolved.

How political wrangling is killing a power plant

IN DISPUTE

North Karanpuracoalfields

Last August, the then-power

minister, Sushil Kumar Shinde

(pictured), informed a ministerial

panel that shifting the site was not

feasible, as it has become a political

issue because the foundation stone waslaid by a former PM of the National

Democratic Alliance government

Unexpected discovery of huge coal reserves beneath NTPCs Karanpura plant site has led to a stand-off between the coal and power ministries