Raipur, Sep 8 (IANS) The state-owned Karnataka Power Corp Ltd (KPCL) Monday signed an agreement with the Chhattisgarh government to set up a 1,200 MW thermal plant on an investment of Rs.60-billion in Chhattisgarh.The plant will come up in the state’s northern region, where India’s state-owned coal producer South Eastern Coalfields Ltd has its mines.

The first unit of the plant will be commissioned by October 2012. This is the first project being taken by the KPCL, set up in 1970, outside Karnataka.

Under the pact, the Chhattisgarh government has ensured early allocation of land and coal linkage for the KPCL under the state’s industrial policy.

Karnataka Chief Minister B.S. Yeddyurappa, who was present during the signing of the deal between the two Bharatiya Janata Party-ruled states, described the project as “a milestone in inter-state co-operation”.

Referring to the agreement, Yeddyurappa said, “It marks a major beginning in power generation history of this country and also in the history of Karnataka”.

“Our proposed pit-head thermal power plant will use coal from nearby coalfields and it will make energy far cheaper. It will also save oil which would have been spent for transportation about six million tonnes of coal from Chhattisgarh to Karnataka if the unit was set up in Karnataka,” Yeddyurappa said.

“More than 50 percent manpower for this plant will be recruited from Chhattisgarh and thus help create employment opportunities in the state,” he added.

Yeddyurappa said Karnataka would offer remunerative compensation packages through a consent-award system to those who lose land to the power project.