Hindujas eye public land for rail link to power plant

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The UPA government proposes to lease out almost 65 hectares of prime land near Vishakapatnam to the multibillion-dollar Hinduja group to lay a dedicated railway line for transporting coal to its 1,040 mw power plant being set up at Pavalavasa on the east coast with over $1 billion investment.

State-run companies NTPC and Rashtriya Ispat Nigam (RINL) along with the Railways hold the title to this land bank that would now be leased out to Hindujas.

The cabinet committee on economic affairs (CCEA) chaired by prime minister Manmohan Singh has to clear the proposal mooted by power minister Jyotiraditya Scindia.

While the coal-fired Hinduja power venture is set to go commercial by May, coal transport to the site may prove tricky given that the CCEA is scheduled to hold its last meeting ahead of the general election after the prime minister returns from the Bimstec conference in Myanmar and the election code of conduct kicks in.

Cabinet clearance is required for any land deal involving central government departments, state-owned companies or autonomous bodies, as per the norms of the urban development ministry.

Power minister Jyotiraditya Scindia and Andhra Pradesh chief minister Kiran Kumar Reddy, who quit recently, have already approved the proposal.

At present, NTPC owns 23.4 hectares of land, while RINL owns 24.24 hectares and 17.2 hectares belongs to the Railways. Scindia has proposed that these land parcels may be leased to the Hindujas to enable them to construct a dedicated railway line from Jaggayyapalem to the project site for uninterrupted coal supplies.

NTPC, Railways and RINL have ‘in-principle’ agreed to lease out their land parcels to the Hindujas on ‘commercial terms’.

“Unless the government approves this proposal over the next few days, handing over the land bank to the Hindujas will become difficult,” a power ministry official said on condition of anonymity.

The Hindujas have already floated commercial tender seeking companies that can implement the 23 km railway line. As a backup, the Hindujas are negotiating with NTPC to use its available rail link to the Simhadri power project for the next 30 months till its own railway connectivity is achieved. The Hinduja power venture is close to NTPC’s Simhadri power plant.

While the NTPC board is not averse to such a deal, the rider is that priority on the line will be for coal movement to feed its own 2,000 mw power project.

“The Hindujas were left with few options but to accept the terms set by NTPC, including commercial terms for using the latter’s railway line,” the official quoted earlier said.

The Hindujas have committed $10 billion in investments to set up power projects across the country. The special purpose vehicle, Hindujas National Power Company (HNPCL), is implementing the first project based on coal near Vishakapatnam. In total, the group plans to build 10,000mw capacity in the country.

The Vishakapatnam project will have two units of 520mw each. The entire output will be sold to the Andhra Pradesh state grid.

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