NTPC may drop 1,600-MW Katwa thermal project - Bengal's policy against land acquisition poses a threat

NTPC may be forced to drop the proposed 1,600 MW (2 X 800 MW) supercritical thermal power project at Katwa in West Bengal, if the Mamata Banerjee-led State Government fails to solve the land tangle.

The State has so far acquired 575 acres for the proposed Rs 9,600-crore project against a requirement of approximately 1,100 acres. West Bengal already entered into power purchase agreement (PPA) agreements with NTPC for half of the generation from Katwa. Originally proposed to be taken up by the State generation utility, the project was handed over to NTPC by the former Left Front government in 2010.

The latter had acquired the land. The pace of acquisition of the residual land remained slow due to resistance from farmers.

Having assumed office in May 20, Ms Banerjee made it clear that the State Government would not henceforth acquire land for industry. Even the acquisition for development projects would not be pursued if opposed by the farmers. To this effect the State Government had also withdrawn land-acquisition notices (issued by the previous government) for the Rajarhat New Town satellite township project.

While the State Government is yet to withdraw the land acquisition notice for Katwa project, sources suggest that NTPC was informally asked to commission the thermal power plant on the available 575 acres.

More land needed

Maintaining that the power major was “committed to the project” and was waiting for handover of the “requisite land”, The NTPC Chairman, Mr Arup Roy Chowdhury, indicated that it would not be possible for the company to set up the plant on the available 575 acres.

“We need 0.7 acres for installing every megawatt capacity. We can accommodate minor modification in land size. However, any outright modification is not technically feasible,” he told newspersons on the sidelines of a seminar organised by the city based Bengal National Chamber of Commerce and Industry (BNCCI) here on Monday.

Direct purchase

On the possibility of direct purchase of residual land, Mr Roy Chowdhury said that the company was agreeable to a “tripartite arrangement (including the State, NTPC and farmer)” for such purchases. Also the price of land should not exceed the compensation package offered under the land acquisition programme.

The Indian power major has already backtracked from its initial offer to set up another 2 X 660 MW thermal power plant at Santhaldih in Purulia district of West Bengal. “We explored the possibility of setting up a facility replacing the existing age old units of Santhaldih power station (under state utility). However, the available infrastructure was inadequate to ensure project viability,” he said.

The company's 2,100 MW Farakka thermal power station in the State suffers from relatively lower plant load factor (PLF), due to lack of regional demand in the off-peak periods.