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September 06, 2008


Orissa delaying water linkage to NTPC Talaipalli

Orissa government has delayed water linkage to National Thermal Power Corporation Limited’s captive coal mining project at Talaipalli fearing protests from farmers in another demonstration of growing conflicts between companies, governments and farmers over scarce resources.

Mr Suresh Mahapatra energy secretary of Orissa said that “There was a law and order problem in the Hirakund dam area last year on the water issue. We are trying to resolve the issue at the earliest."

The delay comes even as NTPC struggles to start production at the first captive coal blocks allotted to it at Pakhri Barwadih in Jharkhand because of procedural issues. Production at this block was expected to have begun in December 2007. A senior NTPC executive said that "With the water clearance pending, we can not go ahead. We are pursuing the matter with the state government, but there has been a delay due to pressure from the farmers."

NTPC’s effort to mine for coal from captive blocks was part of its effort to ensure a stable fuel source for its power plants. Coal is critical for NTPC as more than 80% of its installed capacity of 29,144 MW is coal based. NTPC currently requires 122.94 million tonnes per annum of coal and it expects this to grow further as a substantial portion of the capacity it is adding will be based on coal. NTPC has been allocated 8 captive coal blocks by the government. The problems it has faced at 2 blocks had led power sector analysts to fear changes in the company’s plans to achieve fuel security and reduce dependence on Coal India Limited.

In order to meet this requirement, NTPC plans to double its imports of coal to 5 million tonnes per annum in the current year and will soon float a global tender for the same. The rest of its coal requirements are met through supplies by CIL. It plans to invest about INR 10,000 crore to produce 50 million tonnes of coal annually from its captive blocks by 2013. The company expects coal from these captive blocks to be 20% cheaper than what it pays CIL.