MoEF defers nod to Hinduja coal power project in AP

Hinduja National Power Corporation (HNPC), which has revived its 1,040 mw coal-fired power project near Visakhapatnam in Andhra Pradesh after a gap of more than a decade, has suffered a setback with the Ministry of Environment and Forests (MoEF) deciding to defer the coastal regulation zone (CRZ) approvals to the project following alleged violations by the company.

This makes Hindujas the third independent power producer in Andhra Pradesh to hit snags after the ministry acting against the power projects of Nagarjuna Construction Company (NCC) and East Coast Energy, owing to violent agitations by the local farmers and fishermen.

The expert appraisal committee (EAC) of the environment ministry dealing with CRZ matters, at its meeting held from September 21-23, has taken on record the complaints that the project is proposed in mud flats/CRZ area. The committee preferred a study into the possible adverse impact to the marine environment, arising out of industrial discharges, if any, from the project.

The environment clearance (EC) to this project was issued in 1996. But the EAC has recommended formation of a sub-committee that can look into the alleged adverse environmental impacts being alleged by the social activists and submit a report. "In view of the foregoing observations, the committee (EAC) deferred the proposal (on CRZ clearances).

The proposal shall be reconsidered after the above observations are addressed and submitted," said EAC in its minutes submitted to the MoEF.

Downplaying the impact of this deferment on the project, HNPC managing director Ashok Puri said the CRZ and environment clearances for the main project were already in place and the construction work was progressing. "The CRZ clearances now being sought are for a seawater intake-outfall system and rail corridor for coal transportation. The sub-committee of EAC has completed its study and submitted recommendations.

We are changing our designs by incorporating these recommendations and we expect the EAC to consider our request for CRZ clearances at its meeting scheduled for December," he told ET.

The 1,040-mw project, originally proposed by the Hinduja Group in 1991, was one of the eight power projects that was offered a counter-guarantee by the central government in 1992. However, the project in a joint venture first with Edison Mission Energy and later with the UK's National Power never got off the ground, owing to certain issues pertaining to land and power tariff.

The project also had disputes pertaining to fuel supply arrangement with the public sector giant Coal India. Subsequently, the counter guarantees lapsed.

Though the counter guarantees were revived during the NDA regime in 1999, the Congress-led government in AP during 2004 scrapped the power purchase agreement (PPA) with the company, citing high cost of power. "The PPA was not extended beyond September 2001 and the state government is currently taking a comprehensive view on a fresh PPA with the company," said Ajay Jain, CMD of AP Transmission Corporation.

This is the first power project of the London-based Hinduja, which has ambitious plans to create a power generation capacity of over 10,000 mw over the next 10 years at an expected investment of $10 billion across India. Alleging several violations by the company, the social activists were insisting on fresh public hearings and cumulative environmental impact assessment on the project.

EAS Sarma, former Union power secretary, said: "Hinduja's project was never subject to any meaningful public hearing and public consultation process. We have requested MoEF to order a public hearing to be conducted now on the basis of a cumulative environmental impact assessment (EIA) study as the ground conditions have vastly changed. Moreover, Hinduja has purchased a significant extent of additional land, over and above the government/ Wakf land already obtained from the government. A detailed EIA will therefore be mandatory."

Pointing out that the EC granted to Hinduja's project lapsed in 2001 as the company failed to take up work at the site within the statutory period of validity, Sarma said, adding that the ministry erroneously validated the lapsed EC based on a misleading report, which stated that the construction had started before 2001.