Despite land row, Tuticorin power project set to go ahead

March 2nd, 2009 - 3:31 pm ICT by IANS  

Chennai, March 2 (IANS) Neyveli Lignite Corp (NLC) will go ahead with its 1,000-MW power project in Tuticorin in Tamil Nadu despite a legal tussle over part of the project land between SPIC Electric Power Corp and the Tuticorin Port Trust, a top official said.

“NLC or its power subsidiary will not be affected by the land dispute. The project will proceed as planned as we are not parties to the dispute,” NLC chairman and managing director A.R. Ansari told IANS on phone from Tuticorin.

External Affairs Minister Pranab Mukherjee Saturday laid the foundation stone of the Rs.49-billion (Rs.4,900-crore) Tuticorin project, being developed by NLC Tamil Nadu Power Ltd, an 89:11 joint venture between NLC and the Tamil Nadu Electricity Board (TNEB).

About 36 hectares of the 130-hectare project land had been allotted to SPIC in 1999 for setting up a 525-MW power project.

However, this land allotment was cancelled in 2003, as the power project did not progress, resulting in a dispute between SPIC and the port trust.

The Madras High Court, when approached for a solution by SPIC, referred the matter to arbitration and appointed retired justice K.P. Sivasubramaniam as the sole arbitrator.

“We are waiting for the arbitrator’s final award. We are confident of executing our proposed power project if the land issue is solved,” SPIC managing director R.M. Muthukaruppan told IANS, while declining to share more details.

SPIC is promoted by Tamilnadu Petroproducts Ltd (TPL), in which the latter holds 26 percent stake and the balance by a co-promoter.

According to TPL’s annual report, the company along with SPIC has signed a memorandum of understanding (MoU) with Goldstone Exports to sell 74 percent equity in the power company.

SPIC officials have said the company wants to stick to the original land as it has already obtained necessary regulatory approvals and also spent around Rs.400 million (Rs.40 crore) on the project.

The company has also signed power purchase agreement with TNEB.

Tuticorin Port Officials were not reachable for comments.

Related Stories

    Posted in Uncategorized |